Palladium Pushed Platinum To Record Low

A year ago I wrote about the platinum/palladium ratio as it was on the edge, and there were two possible options, to restore the historically normal supremacy of platinum (target 1.93 oz) or to prolong the triumph of palladium (target 0.56 oz.).

This month the Platinum/Palladium ratio hit a new record low of 0.55 oz. amid the rocket move to the upside in the palladium market; the latter became the most precious metal beating gold. Let’s take a look at the big picture below.

Chart 1. Platinum/Palladium Ratio Monthly: New Record Low

platinum/palladium ratio
Chart courtesy of

The chart above starts with a robust growth to the upside from 3 to 5 oz. and this move had set the “normal” range for the fluctuations of the ratio within the next two decades. It was interrupted only once in 1997 when the ratio fell out of the range and quickly dropped to establish a previous record low of 0.56 oz. in 2001 amid rumors that Russia would ban palladium export. It was a textbook example of a “sell rumors - buy facts” market behavior, the ratio was down on rumors and then when the reality didn’t confirm it the ratio quickly returned to the normal range making a beautiful V-shape pattern. Then the ratio had spent another decade in that range. Continue reading "Palladium Pushed Platinum To Record Low"

Platinum Could Restore Its Supremacy Soon

Aibek Burabayev - Contributor - Metals - Platinum

Last October I focused on the rare case when the price of palladium, for the first time in many years, could surpass the usually dominant platinum price. Both, common sense and chart analysis of the palladium price suggested that the triumph of this metal could be temporary. In the charts below, we can see if this conclusion turned out to be right.

Chart 1. Platinum/Palladium Ratio Monthly: Half-Half

Chart courtesy of

This time I would like to start with the chart of the relative strength of the two metals which is clearly traceable through the platinum/palladium ratio. This ratio is falling sharply from the 2009 high at the 6.09 oz showing the dramatic weakness of platinum compared to palladium. In the chart above, I only show you the period when the drop started to decelerate, and the trend turned flat. Continue reading "Platinum Could Restore Its Supremacy Soon"

Palladium Finally Beats Platinum

Aibek Burabayev - Contributor - Metals

Chart 1. Platinum Vs. Palladium: Crossed Swords

Platinum Vs. Palladium
Chart courtesy of

Sixteen years ago was the last time that platinum was cheaper than palladium in 2001 (black vertical line). By then palladium had spent a year in the dominant position over platinum, and at that time the price of both metals had been fluctuating around $600 level. Since then platinum has returned to its usual upper position to palladium, and the gap was growing exponentially in favor of platinum until it reached the peak with the $1600 of supremacy in 2008. After that, the gap began to narrow and last month it entirely evaporated as a global shift in the automotive industry showed a growing demand for gasoline and hybrid cars (palladium related) amid slowing demand for diesel cars (platinum related).

The Volkswagen emissions scandal started on the 18th of September 2015 (orange vertical line), when the United States Environmental Protection Agency (EPA) issued a notice of violation. I dedicated a post in 2015 to that significant event. The price of both metals continued higher right after that news as the reaction time to such a report always has a gap in such a giant industry. Continue reading "Palladium Finally Beats Platinum"

How To Profit From Government Mandates In Biofuels

The Energy Report: New proposed Environmental Protection Agency (EPA) requirements for the renewable fuel standards (RFS) program could change the landscape for biofuels. What is the new supply-and-demand picture for corn ethanol, biodiesel and sugarcane ethanol?

Brett Wong: This is a proposal, and not a confirmed mandate, which we expect to get by the end of November. The two most important pieces in the standards cover corn ethanol and biodiesel usage requirements. The new proposal for minimum corn ethanol use would be 13.4 billion gallons (13.4 Bgal), which creates a floor. The blendwall, based on Energy Information Administration's (EIA) expectations for gasoline consumption this year, is about 14 Bgal based on 10% ethanol content in gas, which car manufacturers say is a safe level for the fleet. That is the domestic ceiling. This leaves discretionary blending from 13.4 up to 14 Bgal. Beyond that, the demand is from exports, which use up the overall capacity of about 14.7 Bgal. Some people talk about 15 Bgal, but I think that includes some facilities that will never come back on line.

"Renewable Energy Group Inc. could be the biggest winner within the nonintegrated biodiesel providers."

We send a good amount of our ethanol to Canada, which has blending mandates as well. We send some to South America. Brazil has a large blend requirement of 27.5%, which was an increase from 25% last year. That country produces a lot of ethanol from sugarcane, but it has had some rough crop years and must import biofuel to fulfill mandates. There are also more exports going to Asia, where China is trying to clean up its air. Continue reading "How To Profit From Government Mandates In Biofuels"

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How to Profit from Government Mandates in Biofuels

New proposed EPA requirements for the renewable fuel standard program, combined with challenging sugarcane harvests in South America, could increase demand for biodiesel, creating opportunity in a struggling energy sector. In this interview with The Energy Report, Piper Jaffray Analyst Brett Wong names a growing company that could profit from government mandates.

Projected Non-Hydropower Renewable Electricity Generation 2010-15

The Energy Report: New proposed Environmental Protection Agency (EPA) requirements for the renewable fuel standards (RFS) program could change the landscape for biofuels. What is the new supply-and-demand picture for corn ethanol, biodiesel and sugarcane ethanol? Continue reading "How to Profit from Government Mandates in Biofuels"