Global Palladium Investment Fund, created by the Norilsk Nickel in February this year, could buy about 6 tonnes of palladium by the end of 2016, said to Izvestia Sergey Malyshev, the company’s CFO. “The palladium fund was successfully created and made first transactions this year. It is expected that 2016 will become a start year in the work of the foundation. The Norilsk Nickel confirms the maximum limit of the fund’s financing to $200 million. At present, the company has made a smaller amount for the start of operations of less than 100 million. First transaction were made using these funds,” said Malyshev. According to him, in the first half of the year, fund purchases amounted to about 3 tons of palladium. The volume of transactions in the second half of the year will depend on market conditions and may reach a value comparable to the first half. “Given the scale of transactions, the fund will not have a significant impact on the PGM market. We believe that in the future, with speeding-up, the fund’s activity will help to reduce volatility and to increase the palladium demand from large industrial consumers,” Malyshev added. The global palladium market volume is 213 tons. The Norilsk Nickel is ranked first in the world in terms of palladium production, which is mainly used in autocatalysts for reducing harmful emissions into the atmosphere. The company controls about 40% of global palladium market in 2015, having produced about 84 tons of metal. Previously, the Norilsk Nickel has reported that the purpose of the fund creation of a financial instrument for working with large holders of stocks of palladium, the development of industrial demand for the metal, reducing the overall volatility of the palladium market. The price of palladium in January 2016 reached the minimum value of 2010 - less than $500/oz, while in September 2014 the metal price exceeded S900/oz.Now the metal is trading at at $700/oz. “The recovery of palladium prices is gaining momentum against the background of high demand and lack of sales of the ETF funds. The forecast for palladium market is positive, the deficit should increase,” said Malyshev. In February 2016, the Norilsk Nickel announced the establishment of the investment fund Global Palladium with a limit funding of $200 million. At current metal prices around $700 an ounce, the fund’s limit will allow to purchase up to 9 tons of metal. In May, the Norilsk Nickel announced plans for the purchase of palladium for the fund in the amount which may be less than one-third of the stated limit in 2016. At the same time, the Norilsk Nickel has signed a confidentiality agreement, which does not allow to disclose the sellers of the metal.
Source: Uncommercial joint ownership "Trans-regional Association of precious metals producers"