Palladium declines amid expectations of oversupply concerns in 2024

Palladium prices declined on Wednesday even as the dollar dipped against most major rivals, but the industrial metals faced pressures amid expectations of oversupply next year.

Oversupply

The Russian Nornickel company expects the palladium market to shit to a surplus of 300 thousand ounces in 2024, compared to a deficit of 200 thousand ounces in 2023 .

Nornickel wasn't targeted by direct western sanctions, and alone it produces 40% of the global palladium output, used to reduce exhaust fumes in automobiles. 

Nornickel noted that the automotive industry, which uses 80% of the global palladium supply, is slowly recovering following Covid 19 and the supply shocks of 2020 and 2021, and this demand on metals is expected to grow 1% this year.

The company noted that the increased consumption of palladium in 2022 and 2023 has been compensated with sales of accumulated inventories by car companies, with such inventory clearing efforts wrapping up in the second half of the year. 

The major company, which witnessed a 16% collapse in net profits during 2022, expects a global deficit in the palladium market by 300 thousand ounces in 2023. 

As for nickel, the company expects a surplus of 180 thousand tones in the nickel market during 2024.

Otherwise, the dollar index fell 0.4% to 103.7 as of 15:06 GMT, with a session-high at 104.3, and a low at 103.6.

On trading, palladium futures due in September fell 0.1% as of 15:07 GMT to $1,413.5 an ounce.