Market Nuggets: Analysts: Chinese Car-Incentive Program Would Support PGMsTuesday May 29, 2012 9:10 AM
A news report saying that China will soon resume paying subsidies to rural residents who trade in old vehicles for new, fuel-efficient ones bodes well for platinum group metals, analysts say. They cite a Reuters report on Chinese efforts to rekindle demand. “This would be a demand boost for PGMs and, in particular, platinum, especially if it supports fuel efficiency and tighter emission; however, if it targets electric vehicles, there would not be a positive effect for PGMs,” says Barclays Capital. TD Securities says a similar program in the past helped China become the world's largest auto market, surpassing the United States. The Reuters report says that car sales in China could grow as much as 5% to 10% in 2012, versus 5.2% in 2011 and 33.2% in 2010. “A jump in the demand for autos should be bullish for PGMs,” TDS says.
