The company's main activities include the manufacture of autocatalysts
, platinum process catalysts and speciality chemicals and the refining, fabrication and marketing of platinum group metals.
On the demand side, palladium is less affected by European automobile demand because it is used more intensively in the autocatalysts
of gasoline-powered engines which are more prevalent in the US and developing countries.
It said it was "hit by car sales falling sharply in Europe, North America and Asia leading to demand for autocatalysts
being well down on last year".
Platinum fell more than 3 percent to its weakest in two weeks, hit by concernover demand for autocatalysts
after automakers reported a 10thconsecutive month of US sales declines and talk that some automakers sold back inventories.
Platinum should also be a safe bet, partly because of US demand for autocatalysts
, Alliance reckons.
The Chinese platinum jewellery market has boomed along with a robust return to platinum in autocatalysts
and other industrial application, resulting in a series of annual supply deficits.
In those two markets, cars that run on gasoline (requiring a high proportion of palladium in their autocatalysts
) are by far the most popular models.
As chiefly industrial metals used in autocatalysts
, platinum and palladium are more exposed than gold to the economic cycle, and have suffered from a lack of car demand in recent years.
This was despite a slowdown in global auto production, for which Johnson Matthey produces autocatalysts
. Johnson Matthey's shares closed 4% higher at 2016p.
Matthey is braced for an 11% drop in global car production in the period, resulting in reduced demand for autocatalysts
, but it said the stronger dollar and cost efficiencies should help offset some of the slowdown.