MRP’s Long Palladium theme has been enjoying a boost lately. When we launched the theme on October 9, 2017, our rationale was that growing global demand coupled with stagnating supply would set the stage for a multi-year deficit that would the push price of palladium higher. But, after delivering the best return among major raw materials in 2017, palladium has struggled most of this year along with other commodities.
The headwinds have had less to do with industry fundamentals and more to do with fears that trade spats, sanctions on various nations, and rising interest rates will undercut global economic growth. But those fears seem to be dissipating. And in the ongoing global shift away from diesel cars, platinum’s loss is turning out to be palladium’s gain amid a global supply deficit . . .