The platinum and palladium market was under pressure in 2010 due to the recovery in demand after the 2009 recession. The positive trend will continue in 2011, closely depending on the demand for automotive catalysts and exchange traded funds (ETFs).
In addition, there are risks on offer for both platinum and palladium. According to Commerzbank experts, platinum and palladium prices will resume their upward trend in the near future.
According to Johnson Matthey, in 2010 the palladium market experienced increased demand with a deficit of 490,000 ounces. Excess supply has been observed in previous years. As in the platinum market, the moderate growth of palladium supply (2.7% to 7.29 Moz) was outweighed by extraordinary increases in demand in selected sectors. Net demand for autocatalysts has grown by 34% and now accounts for 40% of total palladium demand. Overall, demand for palladium rose 21% to 7.78 million ounces.
Car production is a very important indicator for palladium and platinum; recently, in the manufacture of autocatalysts for diesel engines, one metal has been replaced by another, so a cheaper palladium is demanded. Now about 25% of the platinum needed for the production of diesel catalysts can be replaced by palladium. In addition, catalysts for gasoline vehicles are manufactured primarily with palladium.