Norilsk Nickel says it will not use Stillwater Mining in order to market Russian palladium.

Indeed, the Russian pgm giant revealed that it had no intention of using its US-owned affiliate Stillwater Mining to help facilitate its sales of pgms.

Norilsk marketer, Anton Berlin, told Platts: "Currently, the situation is that both companies are acting separately, and have no problems with selling their production. Our statement is - we sell all we produce. As we understand there is no additional economic benefit from an agreement [for Stillwater to market palladium on Norilsk's behalf], we will not do so."

Mr Berlin went on to acknowledge that discussions about a potential sale had taken place, but insisted that it "was just a discussion between Norilsk Nickel and Stillwater about the possibility of palladium".

Initially speculation had been rife that Norilsk would use its purchase of the American outfit to strengthen its presence in the US, as well as offloading its palladium.

However, analysts such as Moscow metals expert Maxim Matveyev argue that the latest announcement is a result of the improving palladium market.

"Norilsk had announced that the company would not only sell all of its palladium output this year (which we estimate at 2.7-mil oz), but might even sell some from its stockpile. Thus, this year there was no need for the company to secure its palladium sales via an additional agreement with Stillwater," he explained.

Norilsk, which bought Stillwater in the summer of 2003, controls more than 50 per cent of the world palladium market.