LONDON (Reuters) - Analysts and traders have cut their forecasts for autocatalyst metals platinum and palladium as the coronavirus outbreak curtails vehicle sales, but they still expect prices for both to rise gradually through 2021, a Reuters poll showed.
Platinum and palladium are used mainly in engine exhausts to reduce emissions. Platinum is also used in jewellery.
Years of undersupply pushed palladium to record highs above $2,800 (2,207 pounds) an ounce this year, while surpluses have kept platinum near multi-year lows.
Prices plunged in March as the coronavirus choked economic activity but have since recouped some ground as China rebounds.
Palladium - which cost around $2,070 an ounce on Tuesday - will average $2,050 this year and $2,138 in 2021, according to the median result from a poll of 32 analysts and traders.
A similar poll in April forecast averages of $2,100 this year and $2,150 in 2021.
Platinum - currently around $840 an ounce - will average $832 this year and $913 in 2021. The poll three months ago predicted averages of $836 an ounce for 2020 and $945 for 2021.
Graphic: Platinum and palladium prices - here
Palladium is likely to remain in deficit while platinum will be oversupplied, analysts said.
“Auto sector recovery is key for platinum prices, as we doubt jewellery demand will see any revival this year,” said ANZ analyst Soni Kumari.
“The market is flipping from a deficit in 2019 into a surplus of 480,000-500,000 ounces in 2020.”
Palladium use in China has remained solid and there could be a pick-up in speculative buying, which has remained very low, said VTB Capital analyst Dmitry Glushakov.
Reporting by Peter Hobson and Sumita Layek; editing by Pratima Desai and Susan Fenton