Norilsk Nickel, the world’s largest producer of palladium, is reportedly considering selling significant volumes of palladium and platinum to Chinese and Japanese buyers. This move comes as concerns over supply stability in the global market grow, especially after recent disruptions in African mining operations, which are key sources of these precious metals.
Pavel Fedorov, Norilsk’s deputy executive director, confirmed that the company is currently in discussions with major buyers in China and Japan. The goal is to establish long-term supply agreements lasting more than five years. These contracts aim to provide stability for customers who are increasingly worried about rising prices and potential supply chain disruptions.
Fedorov emphasized that industrial clients are now aware of a structural shortage in the market, which is expected to persist over the next several years. With demand from the automotive sector—where both palladium and platinum are essential components in catalytic converters—remaining strong, securing reliable supply has become a top priority.
Since January, when South African miners faced operational challenges, the prices of palladium and platinum have steadily increased. Adding to the uncertainty, recent sanctions on Russia have further shaken market confidence. Last week, palladium reached its highest level in over two and a half years, highlighting the growing pressure on the global supply chain.
South Africa remains the leading supplier of both metals, accounting for 72% of global platinum production and 37% of palladium. Russia, on the other hand, contributes 14% of global platinum and 42% of palladium. Given this concentration, any disruption in either region can have far-reaching effects on the market.
According to the *Financial Times*, Fedorov also mentioned that if an agreement with Chinese partners is finalized, it would be structured as a long-term contract. This marks a shift for Norilsk, which has traditionally relied on annual contracts or spot market sales.
The move underscores the evolving dynamics in the global precious metals market, where long-term partnerships are becoming more critical amid geopolitical tensions and supply volatility. As demand continues to rise, companies like Norilsk are adapting their strategies to ensure both stability and profitability in an uncertain environment.
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