Demand from Nornickel's customers is higher than its production of palladium, a metal used mainly in emissions-curbing auto catalysts, Vladimir Potanin, Nornickel's chief executive and co-owner, told reporters in Moscow.

"The central bank enables us to close this deficit," Potanin said, adding the company only used the central bank's reserves to fill orders, and not for stockpiling.

Nornickel's Global Palladium Fund bought 5 tonnes (around 160,000 troy ounces) of palladium in 2016 at market prices, Chief Financial Officer Sergey Malyshev said.

Purchases were made from Russia's central bank and other suppliers, he said, adding the Fund would buy at least 5 tonnes of palladium in 2017.

Russia's Nornickel says its fund buys palladium from central bank