Palladium likely Outperforms Next Year

The International Business Times.com reports that there is an expectation that Palladium will continue to be strong in 2011.

The editorial is quoted as saying:

We are also bullish on precious metals and believe palladium will be the best performer in the complex. As we mentioned in the weekly report, Johnson Matthey estimates palladium demand will jump +12.26% y/y in 2010, following contraction of around -8% over the past 2 years. Although supply will increase for the first time in 3 years, surplus will only be around 45K oz, the small level since 2000. Potential supply shortage supply in Russia may result to significant palladium deficit in 2011. We find ourselves more optimistic on palladium’s outlook than Johnson Matthey, especially on Chinese demand. In the interim report, Johnson Matthey said that ‘the demand outlook for palladium is so strongly weighted towards Chinese economic and industrial growth that any softening of that growth could reduce demand, moving the market closer to balance’. While we agree that acceleration in China’s tightening measures to curb inflation and asset bubbles will slow demand for palladium, rise in living standards will increase domestic demand for vehicles. Moreover, new emission regulations will also stimulate uses of palladium as autocatalysts.

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