PALL - PALL: Could Supply Response Cause A Short Squeeze?

2024-06-28 07:57:47 ET

Summary

• Palladium has been the worst-performing precious metal in the past few years due to declining demand in automotive applications. Auto accounts for 80-85% of palladium demand.
• Recently, Sibanye Stillwater hinted it may shutter its U.S. operations as palladium prices are not sufficient to cover mining costs.
• If Sibanye follows through on its threat, we could see a short squeeze in palladium markets, as palladium futures short-positioning is at historic levels.

I have been a long-term bear on palladium prices and the abrdn Physical Palladium Shares ETF ( PALL ). In my opinion, the long-term decline in palladium prices is inevitable as its main industrial use is in gasoline catalytic converters, and gasoline internal combustion engine ("ICE") vehicles are increasingly being replaced with electric vehicles....

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