SEPTEMBER HAS BEEN A TERRIBLE MONTH FOR PALLADIUM, SAYS UBS

MULTINATIONAL investment bank UBS has cut all its forecasts for Palladium to $2 000 (R28 711) an ounce. Palladium, the white metal which is used to clean vehicle emissions, was trading below $2 000 an ounce in September as the semiconductor chip shortage weighed on car production. UBS said the illiquid nature of palladium trading are the reasons for the price collapse. UBS said it did not anticipate the sharp sell-off we saw in recent days. “The acute shortage of semiconductor chips is impacting global vehicle production more negatively than we thought earlier, and it seems the effects on car production will continue to be felt until next year. “The low trading volumes, ie illiquidity in palladium, and its small market size did not help either,” said UBS. The investment bank said Chinese car sales plunged nearly 12 percent year-on-year in August signalling less demand for palladium in autocatalysts, which account for about 85 percent of the metal’s demand. | Dineo Faku