Why Traders Need To Watch Palladium And Platinum Stocks Right Now

Zinger Key Points
  • Thirty-nine percent of the global refined supply of palladium comes from Russia, according to Kitco. The country also accounts for around 11% of global platinum supply.
  • Palladium hit an all-time high of $3,017 an ounce in May 2021 before falling on production cuts from the auto industry.

Russia's invasion of Ukraine and resulting sanctions on Russia are putting pressure on several sectors including commodities. Two precious metals that could be affected by the global crisis are palladium and platinum.

What Happened: The U.S. and other countries are imposing sanctions on Russia, which could impact exports out of the country across varying sectors.

Russia is the largest global producer of palladium and the No. 2 producer of platinum, two metals that could be impacted by the Eastern European conflict. 

Thirty-nine percent of the global refined supply of palladium comes from Russia, according to Kitco. The country also accounts for around 11% of global platinum supply.

Palladium is used by automotive manufacturers, in electronics and in jewelry. Platinum is the third most-traded precious metal in the world behind gold and silver and is also used for automotive and jewelry applications along with industrial and medical items.

Palladium was up nearly 7% to $2,648 per ounce on Thursday. The metal started the year trading around $1,905 and is now up over 30% year-to-date.

Platinum was down more than 1% at $1,094 and is up around 15% year-to-date.

Right now, exporters of metals in Russia have not been affected by sanctions, but that could change and the tensions could continue to increase the price of the metals.

The rising price and potential supply issues could hurt the already ailing automotive sector, which has seen supply issues with chips. Companies like General Motors Corp GM and Ford Motor Co F are companies that could see price increases or supply constraints.

Palladium hit an all-time high of $3,017 an ounce in May 2021 before falling on production cuts from the auto industry.

Stocks: Many of the precious metals stocks trade over the counter or on international exchanges. The following are a few stocks on major exchanges that offer exposure to palladium and/or platinum.

Platinum Group Metals PLG is the operator of the Waterberg Project, which has deposits of metals like palladium and platinum. The company has seen shares rise over the last two trading sessions with shares up 3.97% to $2.10 on Thursday. 

Sibanye Stillwater SBSW is a miner of several minerals and among the largest producers of platinum and palladium in the world. The company reported 144,325 ounces of PGM (platinum group metals-platinum, palladium, rhodium, iridium, osmium and ruthenium) produced in the third quarter in its U.S. division and 500,073 ounces in its South African division. Shares of SBSW were up 2.7% to $17.87 on Thursday. 

A-Mark Precious Metals Inc AMRK is a precious metals company with operations across gold, silver, copper, platinum, palladium and other metals. A-Mark offers wholesale sales, secured lending and direct-to-consumer operations.

Related Link: 15 Stocks To watch During Russia, Ukraine Conflict 

ETFs: Several mining and metals ETFs offer exposure to palladium and platinum. Here are some investment options for those seeking exposure to the metals.

Aberdeen Standard Physical Palladium Shares ETF PALL has over $400 million in assets under management and is one of the largest holders of physical palladium. Shares of PALL were up 4.78% on Thursday, closing at $243.53.

Aberdeen also offers a pure-play platinum ETF with the Aberdeen Standard Physical Platinum Shares ETF PLPT. The ETF was launched in 2010 and has over $1.2 billion of assets under management.

The Sprott Physical Platinum & Palladium Trust SPPP invests in physical palladium and platinum and offers exposure to both metals. The ETF was launched in 2012 and gives investors options to redeem their ETF units for physical metals if requirements are met.

The Aberdeen Standard Physical Precious Metals Basket Shares ETF GLTR is less of a pure-play on the two mentioned metals with exposure to gold, silver, palladium and platinum. The ETF could offer exposure to the two metals most affected by raising political tensions along with two metals that are considered hedges against inflation and market uncertainty.

Posted In: NewsSpecialty ETFsCommoditiesSmall CapEventsGlobalTop StoriesMarketsTrading IdeasETFsGoldJoe BidenPalladiumpalladium stocksPlatinumplatinum stocksprecious metalsRussiaRussia SanctionssanctionsSilverUkraine

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