JOHANNESBURG (miningweekly.com) – The palladium price is likely to rise steadily on the back of Russian destocking, growth of the petrol-driven car market and thrifting, Impala Platinum (Implats) marketing executive Derek Engelbrecht says.

Engelbrecht does not expect it suddenly to return to the $1 000/oz level of the start of the decade, but says a steady rise can, nevertheless, be expected, from palladium's current nigh-$300/oz level.

"I don't think palladium is going to be cheap for too long. Just think about China. China is a gasoline market, as is India, and they are using predominantly palladium catalysts and those markets are growing," Engelbrecht tells Mining Weekly Online.

On Monday, African Rainbow Minerals (Arm) CEO André Wilkens told Arm's annual results presentation that Arm's Russian partner, Norilsk, had assured Arm that it no longer held abnormal stocks of palladium in Russia. This followed Engelbrecht calling a Russian destocking position on Friday.

Besides Russian destocking, which Engelbrecht concedes might not be entirely out of the market, owing to a residue of Russian-sourced palladium being held inbond and unpriced in Zurich, he sees palladium as being in deficit once developed-world car sales take off again, combined with Asian growth.

Could the palladium price, which was more than $1 000/oz at the beginning of this decade, go back to $1 000/oz once more?

"In the short term, no," says Engelbrecht, primarily because a large part of the year's supply of palladium inventory in Zurich, held either by investors, or the Russians themselves, was bought at prices higher than today's prices.

"I think that metal will be released, in times of shortage, provided the price incentive is there," he says, adding that the release is unlikely to be in a way that will allow a sudden return to $1 000/oz, "because that metal will be mobilised prior to that happening".

To watch a video of Implats' Engelbrecht on the palladium market, go to www.miningweekly.com and click on ‘Multimedia' and then on ‘Video Clips'.