Platinum and its lesser-known cousin, palladium, have been on a roll lately (see chart below). Both metals are heavily used in catalytic converters for vehicles (auto catalysts account for 32% of platinum demand, and 52% of palladium). Their prices have kept pace with global stocks this year, moving higher roughly in sync with the MSCI World Index of global stocks. So not much evidence of a slowdown in industrial demand here, you might think.
But another platinum group metal, rhodium, which is also used in catalytic converters for vehicles, paints a different picture. Platinum and palladium are also used in jewellery and can be easily purchased by investors via exchange-traded funds (ETFs), so demand isn't based purely on the car industry. But a full 86% of rhodium demand comes from catalysts. That makes it a much more useful guide to industrial activity.
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