UNITED STATES January 19 2015 11:25 AM

NEW YORK (Scrap Register): Barclays expects palladium once again to outperform the complex, including gold and silver, this year. Barclays also expects the upward pressure on prices to remain for the third straight year and test 14-year highs, driven by the market delivering a sizeable deficit for the fourth year in a row.

Investor appetite looks to be supportive, with ETP holdings scaling record highs; more importantly, underlying demand, driven by the auto sector, continues to grow.

Tighter emissions legislation, platinum substitution and growth in key markets – the US and China – bode well for palladium. Downside risks stem from a contraction in auto demand in China; disinvestment; and, of course, surprise stock releases.

ETPs have proved to be a source of supply as well as demand, but the decline in the rouble and Norilsk Nickel’s announcement that it was in talks to buy $2bn of palladium (approximately 2.5Moz) have again cast uncertainty over the size of above-ground stocks.