Palladium plummets 13% on China lockdowns, down 40% in six weeks

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Palladium prices plunged as much as 13% on Monday as commodities tumble across the board amid rising concerns over prolonged COVID-led lockdowns in Shanghai and potential increases to U.S. interest rates that could hurt global growth and demand.

June palladium (XPDUSD:CUR) recently traded -10.6% at $2,120.50/oz after hitting a low of $2,068.82, and July platinum was -2.3% to $906.30/oz.

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With an increasing amount of China being shut, "chances are auto demand and economic activity broadly aren't going to be as strong as we thought, and this is offsetting a lot of the potential shortage concerns associated with the Russian sanctions," Bart Malek, head of commodity strategies at TD Securities, told Reuters.

Russia's Norilsk Nickel (OTCPK:NILSY), the world's biggest palladium and nickel producer, reiterated its full-year production guidance and said its operations remain uninterrupted, indicating that sales have not yet been hurt by the war.

In its first update since Russia's invasion of Ukraine, Nornickel said its Q1 nickel production rose 10% Y/Y to 51.5K metric tons due to the recovery of its two mines after flooding in 2021, palladium production fell 8% to 706K oz, platinum output slid 12% to 163K oz from a higher than normal level a year ago, and copper output remained stable at 91.4K tons.

The company plans to produce as much as 215K tons of nickel, 2.7M oz of palladium and 667K oz of platinum this year.

Palladium prices have retreated nearly 40% since hitting all-time highs above $3,400/oz in early March.