Palladium exchange traded funds bounced Wednesday after China revealed a surge in vehicle sales, and the white metal could continue to outperform as global consumers continue to buy new automobiles.
The ETFS Physical Palladium Shares (NYSEArca: PALL) rose 1.7% Wednesday as the palladium spot prices gained 1.2% to $558.8 per ounce. PALL was down 2.4% year-to-date.
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Supporting the recent bounce in palladium prices, the China Association of Automobile Manufacturers revealed China’s car market is performing better than expected, with car sales in China jumping 9.8% and its best monthly growth year-over-year, China Business News reports.
According to the CPM Group, global demand for palladium in automobiles could rise 3% to a record in 2016 on increased Chinese demand for small cars and on higher U.S. sales of light trucks in response to depressed oil prices, Reuters reports.
“There are massive shifts beginning to emerge in both the supply of and demand for platinum and palladium,” CPM said in its Platinum Group Metals Yearbook 2016. “Automotive use of platinum and palladium is changing, shifting away from platinum toward more palladium and toward non-Platinum Group Metals (PGM) using technologies.”
[related_stories]However, the CPM Group warned that demand for platinum in automobiles could be flat.