This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Palladium May Gain From Yuan Revaluation

Stocks in this article: SWC PAL PLG

NEW YORK ( TheStreet) -- The move to end the yuan's peg to the dollar will lower the import costs of palladium for China's automobile manufactures. Overall, cheaper costs to manufacture cars and a probable decline in car prices will increase automobile demand. This, in turn, will increase the demand for palladium and the metal's price.

Palladium producers Stillwater Mining (SWC), North American Palladium (PAL) "/> -- palladium stock picks -- and Platinum Group Metals (PLG) are poised to benefit from the increase in palladium prices.

China surpassed the U.S. to become the world's largest automobile market in 2009. During the first five months of 2009, production in the domestic auto sector zoomed 56% from a year earlier. Since the auto industry accounts for nearly half of the world's palladium demand, an uptrend in China's automobile production will benefit palladium.

Palladium and platinum are used in catalytic converter applications in automobiles. Palladium has been substituting for platinum as product differentiation is insignificant. However, price spreads between the two metals is quite substantial. Currently, palladium and platinum for spot delivery are trading around $484 an ounce and $1,586 an ounce on the New York Mercantile Exchange.

Palladium deficit is expected to elevate during 2010 because of China's demand, thereby supporting higher palladium prices. Stillwater Mining, North American Palladium and Platinum Group Metals are set to rally from the metal's outlook and may outperform gold and silver stocks even on a risk-adjusted basis for 2010.

In the short term, Stillwater and North American Palladium, with equity betas of 1.90 and 1.67, respectively, may witness a sharp upside in comparison to platinum group metals with an equity beta of 0.99.

Stillwater Mining edged up 2.3% during trading hours Monday. At $13.84, the stock is trading below its 50-day moving average, but above the 200-day moving average.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,879.77 +74.97 0.42%
S&P 500 2,070.13 -0.52 -0.03%
NASDAQ 4,763.8540 -1.5260 -0.03%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs