Sorry they actually meant stockpiled above ground palladium reserves, not in ground reserves, but it still should help v.nkl
From above link...
Supply Concerns Renewed After Recent Comments About Russia
“Analysts say much of the recent strength in palladium came after statements from officials with companies that have good reputations for their grasp of supply issues. In particular, they cited comments out of Johnson Matthey and Russian producer Norilsk Nickel last week suggesting little above-ground official warehouse stocks may remain in Russia.
“There is a feeling that sales from the Russian stockpiles, which have essentially balanced the market and kept it in surplus for the last couple of decades, could be—and I stress ‘could’—be drawing to a close,” Bhar said.
“Could” is the key verb since nobody knows for certain, as the Russian government tries to keep the exact size of its stockpile a secret.
“There have been lots of comments from companies like Norilsk and from other industry experts talking about a drawing to an end of the sales of Russian stockpiles within the next six to 12 months, or something like that,” Bhar said.
Norilsk Nickel and Johnson Matthey officials were quoted in news reports last week as saying that Russian stockpile sales may be only a few metric tons in 2013. Data in Johnson Matthey’s Johnson Matthey Platinum 2012 Interim Review, released in November, estimated that stockpile sales last year fell to 250,000 ounces from 775,000 in 2011. That contributed to what Johnson Matthey estimated was a 915,000-ounce global supply deficit in 2012.
Further, there may be limited potential for Russia to ramp up palladium output quickly, Melek suggested. Much of the country’s output is mined as a by-product of other metals, particularly nickel.
Also, price support on the supply side has come from recent South African news, Melek pointed out. Anglo American Platinum earlier this month proposed cutting back some output of platinum group metals to improve its profitability picture. The bulk of the output loss would be platinum, but this could mean some 100,000 to 120,000 less ounces of palladium annually, Melek said.
“Certainly the South African situation has helped platinum,” Melek said. Analysts generally say some three-quarters of the world’s platinum-mine output is from the country. “But also, South Africa is a very important source of palladium as well,” Melek said.
Data from the Johnson Matthey Platinum 2012 Interim Review showed that some 37% of global palladium supplies last year—not counting recycling—came from South Africa and 43% from Russia.
Demand For Auto Catalysts Seen Picking Up
Analysts cited an expectation that automotive sales will pick up in the key markets of China and the U.S. Both markets tend to rely upon gasoline-powered vehicles than can use palladium in auto catalysts, whereas the European market relies more upon diesel-powered vehicles that need more-expensive platinum.
The HSBC flash Purchasing Managers Index for China, reported last week, hit a two-year high of 51.9 and was seen as a continuing sign that the country is emerging from a two-year slowdown. Then Monday morning, another report showed that U.S. durable-goods orders rose by a much higher-than-forecast 4.6% in December.
“Positive sentiment in general with regard to U.S. markets, and signs of stabilization in China, are two underlying drivers for palladium,” said Filip Petersson, commodity strategist with SEB Commodities.
Further, whereas palladium is associated with gasoline-powered cars, manufacturers are working to evolve technology so they can also substitute some of the platinum with palladium in diesel-powered cars, Bhar said. “The price differential has prompted companies to try to increase loadings of palladium,” he said.
Johnson Matthey’s 2012 data estimated that of total world palladium demand last year of 9.725 million ounces, 6.48 million—or two-thirds—was for auto catalysts.”