Palladium prices fell on Tuesday even as the dollar lost ground against most major rivals, but the industrial metal was pressured by the outlook of oversupply next year.

Market Oversupply

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

Nornickel wasn't directly targeted by western sanctions, and alone it produces 40% of global palladium supplies, used to reduce exhaust fumes in cars.

Nornickel said that the automotive industry, which utilizes 80% of global palladium supplies, is slowly recovering after Covid 19 and the supply shocks of 2020 and 2021, with demand expected to grow on the metal by 1% this year.

The major corporations, which experienced a drop of 16% in its net profits this year, expects a global palladium deficit of 300 thousand ounces in 2023. 

As for nickel, it expects a surplus of 180 thousand tones in 2024. 

The Dollar

The dollar index fell 0.1% as of 16:00 GMT to 102.5, with a session-high at 102.8, and a low at 102.3.

Dollar's weakness removes pressure from metals and makes them cheaper to holders of other currencies.

Palladium futures due in September fell 0.9% as of 16:01 GMT to $1,291.5 an ounce. 

Canada's consumer prices rose 3.4% y/y in May, slowing down from 4.4% in the previous reading, and matching expectations.

Core prices, excluding food and energy, rose 3.7%, below estimates of 3.9%, and down from 4.1% in the previous reading. 

US durable goods orders rose 1.7% in May m/m, the third such increase in a row, while analysts expected a drop of 0.8%.

Core orders, excluding transportation, rose 0.6%, beating estimates of no change, and improving from April's 0.3% drop.

Oil prices fell over 2% in European trade on track for the first loss in three days ahead of initial US crude inventory data today.

Such data will cast shadows on the US appetite for fuel in the summer driving season, with analysts expecting another drawdown. 

Prices are pressured by fading concerns about Russian supplies as calm returns to the political stage in the country following the Wagner mutiny. 

Global Prices

US crude fell 2.4% to $67.78 a barrel, with a session-high at $70.11, while Brent shed 2.1% to $72.82 a barrel.

US crude rose 0.1% on Monday, while Brent added 0.25%, the second profit in a row as dollar declines. 

US Inventories

The American Petroleum Institute will release initial data on US crude stocks later today, expected to show a drawdown for the second week in a row.

Russian Supplies

Standard Chartered's analysts said the world is breathing a sigh of relief as political unrest in Russia got resolved quickly.

The mutiny by the Wagner militia was squashed very quickly, with Russian oil shipments going uninterrupted.