Live Metal Prices / oz
Gold: 1782.52 USD
Silver: 24.32 USD
Platinum: 1052.50 USD
Palladium: 2070.00 USD
Rhodium: 10800.01 USD

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Norilsk Floods Cause an Increase in the Palladium Price

Due to recent flooding in its main mines Norilsk Nickel, the leading world producer of palladium and refined nickel, is faced with a shortage in its supply of palladium. The flood has induced supply shortages which in turn have triggered a rise in the value of Palladium on London Metals exchange market. Despite the fact that the flood hindered the production of both nickel and palladium, the value of palladium rose significantly more than that of nickel. 

But before we get started let’s find out what is palladium? Palladium is a shiny platinum group metal that is worth far more than gold, and is 30 times rarer than gold. Russia is the largest producer of palladium. Until recently it traded at well under half the platinum price and was used as an alternative for platinum. Recently a shift in its demand has led to an increase in its prices. Due to its quality and diverse uses, the demand for palladium is increasing rapidly, and the price of this rare metal is predicted to increase just as quickly.

The current palladium shortage that was caused by the flood in the Norilsk mines has created havoc in different industries that are major users of this metal. The automobile industry has been seriously affected as up to 80% of all palladium production is used by the automotive industry. The supply shortage has caused price increases, benefitting mining companies in spite of the floods. However, Norilsk is concerned about the impact of the flood on their long term business, and are working to quickly get their mines producing palladium again.

The decision by Norilsk Nickel to shut down two of its mines due to a flood has lead to a significant fall in the value of the shares of the corporation, despite the increase in the palladium price. Furthermore, the rise in palladium prices due to the flooding has been criticised. Minor flooding does not affect palladium mining, and many critics argue was an unnecessary reason to close the mine. Norilsk Nickel has had to take speedy actions to try to rectify the problem as quickly as possible. 

Palladium prices have reached new highs on the back of the Norilsk flood, and yet the full impact of the mine closure remains to be seen.