Sunday, February 17, 2008

From Russia with Love

Sports Illustrated is out with their latest swimsuit issue, and Russian model, Irina Shayk, is making her appearance in the issue for the second time. Boy have times changed. When I was sixteen, the only Russian I saw in Sports Illustrated was Alexeyev.

She prefers palladium costume jewelry, while this "mining engineer" prefers wearing gold medals. Above was his 66th world record. (They look a little different in their respective strings!)

But it looks like Russia has decided to put a squeeze on palladium. Half of the world's production comes from them, and it looks like palladium is going to make a move.

It hasn't gone unoticed. Tuesday, the NYMEX will increase Palladium futures margins to $2,250 from $1,750 for clearing members, to $2,475 from $1,925 for members, and to $3,038 from $2,363 for customers after just increasing them on February 6th to $1,750 from $1,000 for clearing members, to $1,925 from $1,100 for members, and to $2,363 from $1,350 for customers. It looks like the NYMEX is worried about a squeeze.

Palladium, besides it's industrial demand, is now being introduced into jewelry, as an alternative to platinum, and China, has been an especially voracious buyer. Do the math. Platinum sells for $2,051 an ounce; palladium is at $445, and rhodium, tips the scales at $8,830. Palladium, can be used as an alloy in white gold and platinum; and it doesn't need the rhodium plating. And 950 palladium jewelry sounds like the 950 platinum standard.

Palladium ETF demand has also been surprising. Zurich Cantonal Bank's palladium ETF, is already over 300,000 ounces, and last week, they added over 50,000 ounces alone. ZCB's projection for the ETF were about 200,000 additional ounces for the year!

And the way to the the move in palladium in are North American Palladium (PAL 6.76) and Stillwater Mining (SWC 16.10).

It looks like the heavy lifting in Palladium as already been done. And the increases in the margin requirements, may mean that a squeeze is in the offing. And those are always a work of art.

From Russia with love!


Anonymous said...

50,000 ounces? c'mon. Where??

Palmoni said...

Holdings in the palladium ETF rose 54,451 troy ounces to 307,602 ounces

I'll add the link, I know it's a lot

Chus said...

Irina Shayk Hot Photos and Videos!!! :)