LONDON (Reuters) – Platinum and palladium markets will be tight this year as the coronavirus pandemic hammers supply and demand, materials maker Johnson Matthey said on Monday, declining to give full-year forecasts and saying prices will be erratic.
Production of the metals, used to reduce vehicle emissions, and their consumption by auto makers could fall by around one-fifth in 2020 but the course of the virus is too uncertain to give precise numbers, the company said in a report.
Temporary dislocations as the new coronavirus impacts different places at different times could have the biggest influence on prices, Rupen Raithatha, Johnson Matthey’s director of market research, said.
“The cold market balance, whatever it may be in the end, may not be the biggest determinant of price direction and volatility when you have large parts of the market offline and the potential mismatch between supply and demand coming back,” he said.
Prices of platinum, palladium and sister metal rhodium have recovered some ground after falling by around half as the coronavirus swept the globe, closing industry and hurting auto sales.