The outlook for platinum and palladium is mixed as different parts of the world are experiencing different trends in transport and vehicle sales - important factors in demand for both metals.  

The Fortis/VM Group's Materials in Transport paper released today said European demand for palladium and platinum should remain steady over the current twelve months as new European Union member states will account for the bulk of vehicle sales.

The investment research document said the European trend of moving away from petrol to diesel-powered vehicles would continue, boosting demand for platinum rather than palladium metal. 

However, in the long-term, a focus on reducing the weight of motor vehicles to reduce fuel consumption and greenhouse gas emissions on the continent will lead to the manufacture of smaller catalytic converters requiring smaller quantities of both metals.  

In the United States immediate prospects for the metals are slightly more negative as concerns over the economy are hitting vehicle sales significantly.  

Demand for platinum and palladium will also be dampened in the US in the longer term, as there are signs that US drivers are feeling concerned about fuel consumption and this will lead to higher demand for lighter cars.  

Also in the US, there are signs that diesel is becoming a more popular fuel, but its popularity still has a long way to climb before demand reaches European levels and boosts platinum demand at the expense of palladium.  

In the East, Japan's declining domestic market will continue to diminish demand for both metals in that market. However, China will remain a major growth area due to the rate of economic expansion there.