NEW YORK, Nov 13 (Reuters) - Platinum demand from 
automakers for catalytic converters will climb 2.3 percent to 
4.24 million ounces in 2007 on the back of robust sales of 
light-duty diesel vehicles in Europe, platinum specialist 
Johnson Matthey Plc said on Tuesday. 
    Increased gasoline vehicle production in Asia and growing 
usage of after-treatment in the heavy-duty diesel sector should 
also boost platinum demand, the London-based chemicals and 
refining company said in its "Platinum 2007 Interim Review." 
    However, the continuing substitution of palladium for 
platinum in catalyst formulations, and near-record platinum 
prices resulted in a minor decrease in platinum use in North 
America. 
    "Over 90 percent of the 2.11 million ounces of platinum 
used in European autocatalysts this year will be used in diesel 
vehicles. The market share of diesel vehicles continued to grow 
to 52 percent of sales," Johnson Matthey said. 
    Platinum and palladium are employed in varying amounts in 
autocatalysts to filter out carbon monoxide and particulate 
emissions. 
    While palladium is a more efficient in gas engines, 
platinum is primarily used in diesel vehicles. 
    The company said that the increased usage of diesel 
particulate filters (DPFs) should boost demand, in spite of the 
fact that many cars already meet current Euro IV emissions 
limits are without such filters. 
    DPFs are widely used in markets such as Germany due to tax 
incentives and pressure from environmentally conscious 
customers, Johnson Matthey said. 
    The company said that North American automotive platinum 
demand is expected to be 900,000 ounces in 2007 compared with 
905,000 ounces a year ago, hurt by poor total vehicle sales due 
to financing restrictions related to credit market jitters. 
    However, increased platinum use on medium- and heavy-duty 
diesel trucks should support demand. 
    In Japan, platinum demand from the auto industry was 
forecast to rise 1.7 percent to 615,000 ounces this year, 
largely because car makers in Japan have been slower than other 
regions in replacing platinum in their catalysts with 
palladium. 
    Johnson Matthey said that China automotive platinum demand 
should jump 26 percent to 210,000 ounces in 2007 on its booming 
passenger car industry. 
    Meanwhile, the company said it expected that 885,000 ounces 
of platinum will be reclaimed from spent autocatalysts in 2007, 
up 3.5 percent from a year ago, boosted by high platinum 
prices. 
    CHEAPER PALLADIUM SUBSTITUTION 
    In sister-metal palladium, which was trading at about a 
quarter of platinum's price, purchases by the auto sector are 
set to rise 7.8 percent to a six-year high of 4.38 million 
ounces. 
    "The sustained price differential between platinum and 
palladium has ensured that the process of switching production 
to the cheaper metal, both in gasoline and diesel autocatalysts, 
has continued this year," Johnson Matthey said. 
    North American palladium autocatalyst demand should increase 
by 10.4 percent to 1.64 million ounces in 2007, helped by the 
tightening of the U.S. Federal Tier II legislation, the company 
said. 
    European palladium demand in vehicles should rise 1.7 
percent to 895,000 ounces, while Japanese demand will gain 5.7 
percent to 795,000 ounces. 
    Palladium recovered from the recycling of catalytic 
converters is expected to jump 18.1 percent to 945,000 ounces in 
2007, Johnson Matthey said. 
 (Reporting by Frank Tang, editing by Matthew Lewis) 
 (([email protected]; +1 646 223 6126; Reuters Messaging: 
[email protected])) 
Keywords: PLATINUM AUTOCATALYSTS/