Video: Gold mining faces a cliff after 2025, CRU analyst predicts
Global gold production will peak at about 3,250 tonnes (105 million oz.) next year, according to CRU's Oliver Blagden.
Norilsk Nickel, the world’s largest palladium producer, said on Thursday it was using air cargo flights to ship supplies of palladium and platinum because most of the passenger flights it usually uses had been suspended.
Nornickel said in its market report, which it updates twice a year, that deliveries to clients had not been affected despite the disruptions to passenger flights.
The company also said Russian commercial banks were using charter planes for gold and silver exports after the Russian central bank decided to suspend gold purchases from domestic clients.
“This channel can also be used by Nornickel, if necessary,” the company said, adding that there was a good flow of precious metals in general from Russia, the world’s third largest gold producer after China and Australia.
Nornickel expects supply and demand to be in balance in the global palladium market this year with the oversupply in March-May to be followed by a deficit in July-December, it said in the report.
Global use of palladium is expected to fall by 16% in 2020 mainly due to decline in demand from the auto sector
The global use of palladium is expected to fall by 16% in 2020 mainly due to decline in demand from the auto sector, which accounts for 80% of the global consumption of the metal. The use in dental applications is also facing severe demand destruction.
Nornickel is not having any issues with sales of its products so far despite the pandemic, it said.
“As of today, there have been only a few requests from the clients to postpone or to cancel insignificant volumes of deliveries that have been promptly redirected to other buyers,” it added.
The company has upgraded the palladium market forecast and expect a balanced market instead a 0.2 Moz surplus predicted a month before. The current forecast stands at 9.3 Moz both for the supply and demand sides.
Palladium consumption is expected to decrease by —16% Y-o-Y, supply to fall by 12%.
The metal was trading up 1.2% to $1,843 an ounce on Thursday afternoon in New York.
The platinum consumption in 2020 is estimated at 6.2 Moz, 17% lower than in 2019, as a result of sluggish auto sales in Q1 as well as decrease in platinum demand for jewellery in China. According to the company, platinum supply in 2020 is expected at 6.8 Moz, and 0.6 Moz market surplus is forecasted.
At Thursday’s close, in New York, platinum was trading at $772 per ounce, up 1.58%.
Nornickel’s analysts improved the nickel market outlook for 2020. Currently, the market balance is estimated to be at a surplus of 130 kt. Nickel production is forecast to decrease by —1% Y-o-Y mainly due to the decline in Chinese NPI output.
Overall, nickel demand will drop by —7% Y-o-Y, according to the report.
The metal was trading up 0.61% to $12,200 an ounce on Thursday afternoon in New York.
“We upgraded our nickel and palladium market forecasts amid the rapid economic recovery in China, an expected bounce-back effect in the automotive industry in 2H as well as higher expected disruptions on supply,” commented Anton Berlin, the Marketing Director of Norilsk Nickel.
(By Polina Devitt and Anastasia Lyrchikova; Editing by Edmund Blair)
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