Global palladium inventories have dwindled and are now sufficient to meet only 16 weeks of demand, according to CPM Group, a consulting firm. Palladium is usually mined together with platinum, a more expensive metal.
The lower supplies go, the higher prices will rise, investors say. “If there’s not much supply, it all just gets sucked up” by manufacturers and other palladium consumers, said Frank Holmes, CEO of U.S. Global Investors, which manages about $1 billion.
The miners’ strike, which involves some 70,000 workers, is the longest ever in South Africa.
After Monday’s talks ended without an agreement, newly appointed South African Mining Minister Ngoako Ramatlhodi said he would exit from the talks.
Meanwhile, palladium users have few other places to turn for supply.
Russia exports more palladium than South Africa, but relies on Cold War-era stockpiles to supplement production.
Many analysts think those extra supplies are running low.
No other country is a significant palladium producer.