The decision to ban diesel cars is attributed to cutting down o pollutants. Diesel engines, even “clean” diesel, emit an exceptionally high amount of particulate emissions compared to other motors.

Car manufacturers in Europe where diesel makes up around 50% of the market are the biggest industrial consumers of platinum – autocatalysts represent more than 40% of platinum demand.

Meanwhile, gasoline engine cars makes up for 70% of overall palladium demand.

The ETFS Physical Palladium Shares (NYSEArca: PALL) declined 6.3% Thursday as the palladium spot price fell 6.2% to $978.2 per ounce.

Precious metals were were also pulling back and extended losses after comments from Federal Reserve Chairman Jerome Powell this week added to speculation for further interest rate hikes and propped up the U.S. dollar to a near six-week peak. A tighter monetary policy typically weighs on physical assets, notably precious metals, as it raises the opportunity cost of holding on to non-yielding assets while strengthening the greenback, in which the metals are priced.

For more information on the metals space, visit our precious metals category.

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