Norilsk Nickel, the world's largest producer of nickel and palladium, expects prices for its metals to rise in the second half of the year because of investor demand, its head of marketing said. Viktor Sprogis told reporters that unrest in major producing areas would have less impact on prices than investor demand, especially for platinum group metals.
"I like PGMs much more than gold. They have very high price support in the form of production costs," Sprogis said. Norilsk Nickel accounts for 40 percent of world supplies of palladium , which hit $822.52 per troy ounce on the London Metals Exchange (LME) on Friday, up more than 10 percent this month. "Investment demand for PGMs will increase," Sprogis added.
According to a market comment by HSBC, PGM prices could continue to rise if coal strikes in South Africa led to power cuts at key mines. But Sprogis said the metals market would not see major upheaval from strike activity in South Africa, which supplies 80 percent of the world's platinum. Supply cuts in 2008 pushed platinum to an all time high of $2,290 per ounce.
Sprogis also said the market would not see major changes as a result of a strike at the world's largest copper mine, Chile's Escondida. LME copper hit its highest level since April on Friday, two days after Escondida declared force majeure on copper concentrate sales.
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