Deutsche Bank: The fundamentals for palladium are more constructive than platinum
According to Deutsche Bank:
However, the rotation into global equities and other reflation trades has benefited the PGM sector with palladium and platinum among the best performing commodities on a spot price basis since the end of last year. While platinum is in danger from any setbacks to the euro area recovery and any reversal in investment flows, we believe the fundamentals for palladium are more constructive. Indeed measures to improve emission and fuel-efficiency standards in China will be net positive for palladium demand since vehicle growth in the country is likely to be weighted towards gasoline, and hence palladium auto catalysts.
Reducing the extreme levels of air pollution in China has moved to the top of the political agenda for the new government. We expect measures to address this crisis may have important long term implications for industrial sector activity and the country’s energy mix. To achieve the objectives of cutting pollution to safe levels would have obvious negative implications for coal consumption.