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LONDON (Scrap Monster): Palladium has been hurt more than platinum during recent bouts of risk-off trading, but palladium seems to be finding some industrial support, said Union Bank of Switzerland (UBS), in a commodities briefing.

According to UBS, the platinum/palladium ratio (the number of ounces of palladium needed to buy an ounce of platinum) turned south last week after touching the highest level in a month at 2.45.

Analyst with UBS stated that, “On a relative basis, palladium is performing slightly better than platinum at the moment. This is on the back of good industrial demand below $600 and an overextended short position that is becoming increasingly at risk.”

Palladium’s fundamentals are more attractive than platinum for some time. Yet, palladium has lagged platinum year-to-date.

“One key reason is palladium’s relatively higher downside vulnerability in a ‘risk-off’ scenario. When risk appetite comes under pressure, the lack of liquidity in the palladium market becomes a big concern,” the investment bank concluded.

UBS provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland.