Barclays also projects that platinum demand will grow 1% this year, but it may fall short as economic growth slows. LMC Automotive Ltd. estimates that global car and light commercial vehicle sales will expand 5.5% to a record 79.4 million units this year.
“China re-introduces car subsidies for rural residents,” ETF Securities said. “As most autos sold in China run on gasoline rather than diesel, continued robust China auto sales is particularly bullish for palladium, the main metal used in gasoline autocatalysts.”
After platinum prices averaged an all-time high of $1,721 last year, car-makers have implemented more palladium into autocatalysts – palladium makes up about 30% of metal loaded into catalytic converters for diesel engines, up from 20% in 2009.
“The future outlook for palladium is excellent as it continues to benefit from positive supply and demand fundamentals,” said North America Palladium CFO Jeff Swinoga in a Minyanville report Tuesday.
ETFS Physical Platinum Shares ETF
For more information on either precious metal, visit our palladium or platinum category.
Max Chen contributed to this article.