Norilsk Nickel to increase 2017 palladium purchases
LONDON, Nov 20 (Reuters) – Russia's Norilsk Nickel, the world's top palladium producer, said it plans to boost purchases of palladium for its fund from Russian central bank reserves to help ease shortages in the market.
Head of Global Sales and Marketing Markus Meurer told Reuters ahead of a presentation to investors that purchases in 2017 would rise to as much as 600,000 ounces. This compares with about five tonnes (160,764 ounces) last year.
"The market is very tight," he said.
"We do not want to run the risk of incentivising substitution in the market. So to make the metal available to our key industrial users, that's our strategy."
Prices of palladium, chiefly used in emission-curbing auto catalysts, have soared 45 percent this year on fears of shortages, while sister metal platinum has added 5 percent.
Norilsk has a fund which buys palladium from Russia's central bank reserves and other suppliers. The fund then uses the metal to fill orders, not for stockpiling.
Earlier this year, Norilsk said it expected its 2017 fund purchases to be at around the same level as last year.
Palladium's global market deficit is on track to reach 1.8 million ounces in 2018, up from 1.2 million this year, Anton Berlin, head of strategic marketing, was due to tell the investors' day, according to a presentation.
(Reporting by Eric Onstad, editing by Louise Heavens).