These two precious metals are offering a rare hedge against Ukraine conflict

As the crisis in Ukraine deepens with Russian troops advancing slowly on Kyiv, Ukraine’s capital, the war is having a huge effect on two metals: palladium and platinum. Moscow-based Nornickel is the world’s largest producer of palladium and platinum, both of which are used in catalytic converters to clean car exhaust fumes.

According to ETF Securities, “both platinum and palladium are used extensively as car catalysts, where they scrub pollutants from car exhaust fumes. But other uses include electrolysers, where platinum catalysts help break down water into hydrogen and oxygen. Also in dentistry, where palladium is used to make crown and bridge restorations. And semiconductors, thanks to platinum’s high electrical conductivity. Not only are they widely used, platinum and palladium are difficult to replace or substitute.”

Kanish Chugh, head of distribution at ETF Securities says, “given Russia’s central role in their production, ejecting Russia from global trade could impact supply and ultimately prices – especially of palladium. The repercussions could be felt throughout the value chain, impacting everything from the car industry to glass-making to medical equipment.”

Palladium has strongly rallied this year, and is up 35% in Aussie dollars (as of 28 February,2022). Should the Russia-Ukraine war drag on or escalate, supply and prices could be further impacted. ‘For investors looking to invest in platinum or palladium, ETF Securities offers two ETFs, which are 100% physically backed by platinum and palladium,” Chugh adds.

These are the only products of their kind in Australia, he says: ETFS Physical Platinum (ASX code: ETPMPT) and ETFS Physical Palladium (ASX code: ETPMPD).

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.