Palladium Market In 760,000-Oz Surplus In '09 -Johnson Matthey
- LONDON -(Dow Jones)- The palladium market was in a 760,000-troy-ounce surplus in 2009, as supply cuts by producers during the recession failed to match the steep falloff in demand, metals fabricator Johnson Matthey PLC (JMAT.LN) said in its annual report Monday. Demand for palladium fell 6.3% to 7.77 million ounces, with automakers cutting their purchases by 9.3% to 4.05 million ounces. Palladium demand fell less steeply than that for platinum, as government car-scrappage schemes encouraged purchases of smaller, gas-engine vehicles that have high palladium content. Palladium, like platinum, is used in auto catalysts by automakers to filter car exhaust. Demand from automakers in the U.S. fell 20.95% to 1.02 million ounces, and in Europe dipped just 10,000 ounces to 995,000 ounces due to scrappage schemes in France, Germany and the U.K. The trend was different in China, where demand jumped 75% to 685,000 ounces. Jewelry demand fell 17.3% to 815,000 ounces. China accounted for most of the decline, as buyers there have a preference for platinum and more producers tried to take advantage of the bigger profit margins in platinum sales. Investment demand rose by nearly 50% to 625,000 ounces, largely due to buyers of exchange-traded palladium funds. Palladium ETF holdings increased by 530,000 ounces, as investors bet on a recovery in auto sales and expected palladium to benefit from rising gold prices. Supplies of palladium dropped 2.9% to 7.1 million ounces, with output falling in Russia, South Africa and North America. Supply from recycling fell 11.5% to 1.43 million ounces. Sales from Russia, the world's biggest producer, fell 1% to 2.68 million ounces, while the government sold an additional 960,000 ounces from state stockpiles. Output in South Africa dropped 2.5% to 2.37 million ounces, and by 17% in North America to 755,000 ounces. -By Matthew Walls, Dow Jones Newswires; +44 (0)20 7842 9412; matthew.walls@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=6j2gDbwTafmyOYHmCUKfMw%3D%3D. You can use this link on the day this article is published and the following day.
