Platts
Despite recent monthly data showing a substantial drop in imports, Chinese palladium demand is expected to grow this year, though at a slower pace than last year, analysts with Barclays Capital said in a report Tuesday.
Chinese palladium imports in May fell 31.5% year over year to about 50,200/oz., the lowest level since April 2009. For the January-May period, palladium imports are down 7% year over year.
Barclays analysts noted demand from China's auto sector has weakened. Palladium is used to make catalytic converters for gasoline-powered automobiles, like those driven in China and the U.S.
Auto sales in May were down 3.9% at 1.38 million units, the second consecutive monthly decline and the first two-month decline since 2008. Sales slowed following the expiration of some incentives and congestion-easing measures in Beijing and Shanghai, analysts said.
But China's central government has decided not to scrap the subsidy for small cars, "and our equity auto analysts have identified a number of regions for potential growth, equating to 6% growth rate per annum," Barclays analysts said.
Barring any near-term weakness, China's net palladium imports are expected to exceed last year's total of 945,000 oz, albeit at a slower pace, according to Barclays analysts.
Palladium demand continues to be supported by China's bias towards gasoline-powered vehicles and the growing preference towards larger vehicles, along with the next wave of emissions standards, scheduled to be implemented this year, Barclays analysts said.
Despite recent monthly data showing a substantial drop in imports, Chinese palladium demand is expected to grow this year, though at a slower pace than last year, analysts with Barclays Capital said in a report Tuesday.
Chinese palladium imports in May fell 31.5% year over year to about 50,200/oz., the lowest level since April 2009. For the January-May period, palladium imports are down 7% year over year.
Barclays analysts noted demand from China's auto sector has weakened. Palladium is used to make catalytic converters for gasoline-powered automobiles, like those driven in China and the U.S.
Auto sales in May were down 3.9% at 1.38 million units, the second consecutive monthly decline and the first two-month decline since 2008. Sales slowed following the expiration of some incentives and congestion-easing measures in Beijing and Shanghai, analysts said.
But China's central government has decided not to scrap the subsidy for small cars, "and our equity auto analysts have identified a number of regions for potential growth, equating to 6% growth rate per annum," Barclays analysts said.
Barring any near-term weakness, China's net palladium imports are expected to exceed last year's total of 945,000 oz, albeit at a slower pace, according to Barclays analysts.
Palladium demand continues to be supported by China's bias towards gasoline-powered vehicles and the growing preference towards larger vehicles, along with the next wave of emissions standards, scheduled to be implemented this year, Barclays analysts said.
