More than half the annual global demand of about 10 million ounces for palladium is from the automobile sector, while a quarter is used in other industries and in dentistry. Physically backed exchange-traded funds account for some demand, and about 4% of demand comes from jewelry.

Car sales in China, the world's biggest auto market, are expected to grow by 11% this year to reach 24 million units out of the global total of 88.5 million, according to industry consultancy Frost & Sullivan. It expects U.S. sales to climb about 4% to almost 16 million.