Today, a range of palladium stocks are in focus for investors. This shift in focus toward this precious metal is for a number of reasons. However, shares of Sibanye Stillwater Limited (NYSE:SBSW), Impala Platinum (OTCMKTS:IMPUY), Anglo American Platinum (OTCMKTS:ANGPY) and Canadian Palladium Resources (OTCMKTS:DCNNF) are all surging today. Indeed, these stocks have moved between 6% and 10% higher at the time of writing, suggesting a sector-specific move is underway.
As mentioned, there are a variety of factors driving the outsized moves these stocks are seeing today. Broadly speaking, palladium is a precious metal with a number of industrial purposes that give it value. For example, palladium is used in a range of jewelry (to make white gold, for example), dental fillings and car parts such as catalytic converters. Thus, palladium is one of the metals that’s often looked at as a quasi-economic indicator.
However, like any commodity, supply and demand reigns supreme when it comes to the price of this precious metal. Today, there’s some substantial news on this front driving palladium prices higher.
Therefore, let’s take a look at why these palladium miners are seeing their valuations skyrocket today.
Russian Refiner Suspension Causes Palladium Prices to Surge
Russia happens to be a key producer and refiner of palladium. While a number of U.S. and Canadian producers do hold significant market share in the global marketplace, disruptions to the global palladium supply chain can cause price spikes.
Today, the announcement that the London market will no longer accept deliveries of refined palladium from the Gulidov Krasnoyarsk Non-Ferrous Metals Plant Krastsvetmet and the Prioksky Plant of Non-Ferrous Metals sent palladium prices spiking. As of this morning, palladium prices spiked 8%, with expectations rising that these price increases could continue for some time.
For palladium miners, this is obviously good news. However, for those relying on palladium as input costs, this is another inflation driver to watch. Accordingly, the broader market may continue to see volatility following this latest supply chain disruption.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
