Robust growth in China's car industry is expected to push up autocatalyst demand for platinum and palladium by more than a third in 2010 from a year earlier, Johnson Matthey said on Tuesday.
In a closely watched industry report, JM said China's automotive platinum demand is set to jump by 35 percent on the year to 115,000 ounces in 2010. Next year it is likely to continue to grow, JM officials said.
Palladium demand in the automotive industry, chiefly for use in autocatalysts for gasoline-powered engines, is also expected to soar in China to 930,000 ounces this year from 685,000 ounces in 2009.
"China is set to see an increase in automotive palladium demand of 36 percent this year as production of almost exclusively gasoline cars reached 15.8 million units," the report said.
This was "driven by demand from an increasing affluent population, and supported by government incentives providing credit support for purchase of small cars," it added.
China took over from the United States as the world's biggest auto market last year, and is therefore a key driver of demand for platinum and palladium, more than half of which are consumed by the car industry each year.
Buoyant growth in Chinese car demand helped support autocatalyst demand for the metals last year, as auto sales in more developed markets like the United States and Europe waned.
