New emissions standards in China for cars become effective in 2020 and will “increase the amount of palladium needed in every car,” R. Michael Jones, chief executive officer of Platinum Group Metals Ltd., told MarketWatch.
China may even be trying to secure palladium reserves in case of a worst case scenario between the U.S.
“We continue to think that China is strategically buying forward or is attempting to secure supply before even more adverse tariffs are in position,” analysts at Zaner Precious Metals wrote in a recent note.
A surge in new car registrations across the European Union over July and August bolstered palladium prices, according to Commerzbank analysts. The sudden demand for gasoline-powered automobiles, which require palladium catalytic converters, may be seen as a shift away from diesel-fueled vehicles following the Volkswagen scandal in 2015.
For more information on the palladium markets, visit our palladium category.