Rising Chinese auto sales favorable for Palladium demand

CHINA July 13 2016 1:31 PM

NEW YORK (Scrap Register): Rising Chinese auto sales good for platinum group metals demand, especially palladium demand.

According to HSBC, Chinese auto sales announced this week are favorable for platinum group metals. The bank cited data from the China Association of Automobile Manufactures showing passenger vehicles sales jumped nearly 18% year-on-year to 1.78 million vehicles in June and were only 0.5% below May sales. 

First-half auto sales were up 8% year-on-year. June sales of sport-utility vehicles rose 40% from the same month a year ago.

China is the world's biggest auto market and strong sales growth means good palladium consumption. Most vehicles in China are gasoline-fired, which have relatively heavy palladium loadings and require little if any platinum. 

But SUVs are heavier vehicles and may require some platinum in their auto catalytic loadings. Diesel vehicle demand is also higher, which is more positive for platinum, as diesel vehicles require heavier platinum auto catalytic loadings.