* Russian state sales in 2012 estimated at 250,000 oz
* Expected to drop to around 100,000 oz this year
* Norilsk 2013 palladium output to decline slightly
By Polina Devitt
MOSCOW, May 13 Sales of palladium from Russian
state stocks are likely to contribute less to supply this year
and "in the foreseeable future" than they did in previous years
after falling by two-thirds in 2012, Johnson Matthey said.
Sales of Russian state stocks have helped keep the palladium
market in surplus for eight of the last 10 years. Stocks at the
Gokhran state repository are almost depleted following those
exports, platinum refiner JM said on Monday in its Platinum 2013
JM said it believed there might be some residual sales of
metal in 2013 but at much reduced levels of around 100,000
ounces. That low level is likely to leave the market in a
structural deficit, potentially pushing prices higher.
"What has been gleaned in the last few years supports a
growing consensus ... that sales from stocks in 2013 will be
less than half of the 2012 level, which was itself sharply down
on earlier years," the company said.
JM estimated that sales of palladium from
government-controlled inventories fell to 250,000 troy ounces in
2012 from 775,000 ounces the previous year.
"If this outlook is correct, the overall supply of primary
palladium in 2013 will probably fall, as it is unlikely that new
production this year will be able to compensate for the
predicted drop in sales of palladium from Russian state
inventories," the refiner added.
Production of platinum group metals from Norilsk Nickel's
Russian operations, the main source of palladium
supply to the market, is expected to decline in 2013.
JM cited Norilsk's 2013 guidance for palladium
output of 2.60-2.61 million ounces and platinum output of
640,000-650,000 ounces at its Russian divisions.
Last year its total output was 2.73 million ounces of
palladium and 683,000 ounces of platinum, down 3 percent and 2
percent year-on-year respectively.
Norilsk accounts for 41 percent of global palladium output
and 11 percent of platinum production.
JM lifted its estimate for Russian rhodium production in
2012 to 90,000 ounces from 70,000 ounces late last year, after
Norilsk refined large quantities of stored pyrrhotite
concentrate, which is relatively enriched in rhodium.