Palladium forecasts are varied
-- Purchasing, 11/14/2005
Palladium’s price may rise 21% in 2006 to an average $230/troy ounce because of expanded use in China for automotive catalytic converters and jewelry production, forecasts Antaike Information Development in Beijing. Interestingly, forecasts for palladium in 2006 are mixed: Barclays Capital of London projects palladium at an average $180 while Citigroup in New York projects palladium at $265.
Palladium’s average annual price may rise from the anticipated $190/oz average in 2005, according to precious metals analyst Jin Xiangyun at Antaike. In an interview with the Bloomberg News Service, Jin says demand may soar for the cheaper metal for catalytic converters used to cut tailpipe emissions because palladium is trading as much as four times lower than the price for platinum, the prime autocatalyst material. About 60% of palladium already is used to make catalytic converters globally, with another 30% used by jewelers as so-called white gold, and the rest used in electronics components.Precious metals consultant GFMS in London reports that demand for jewelry containing palladium already is rising 43% in 2005—mostly fuelled by Chinese consumption. "The huge potential for Chinese use of palladium in jewelry will give a strong boost to market confidence and we’ll also see more hedge fund (investment) interest in the metal" suggests Jin, who works for Antaike, a research affiliate of the China Nonferrous Metals Industry Association, which advises the Chinese government leadership on industry policy.
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