Russian metals miner Nornickel expects the deficit in the global palladium market to widen in 2021 due to flooding at its mines and an accident at its plant earlier this year, it said on Thursday.
The world's largest palladium producer plans to partly compensate for the deficit from its stockpiles left from 2020, it said in a statement, adding that its Global Palladium Fund could also provide metal if there was a need to do so.
One of Nornickel's two underground mines, hit by a sudden inflow of water in February, has already resumed output at full capacity. The second is expected to restart in early June. Its plant, part of which collapsed during maintenance in February, will return to full capacity by October.
Nornickel currently expects a global palladium deficit at 0.9-million troy ounces in 2021, up from 0.3-million ounces in 2020. It previously expected it at 0.2-million ounces this year.
Nornickel will fulfil all its current obligations with clients this year despite the accidents, which will reduce its production, it said.
It updated its view on the nickel market, currently expecting a 2021 surplus at 52,000 tonnes compared to its previous estimate of 90 000 t. It estimates the surplus at more than 100 000 t in 2022, the world's leading producer of refined nickel said.