Platinum, palladium hit multi-yr lows on weak China demand

Weakened auto demand from the largest market in the world-China- too led to the fall in the metal prices. Platinum and palladium are mainly used in catalytic converters that help control harmful auto emissions.

China's falling growth rate, its slowest in 25 years, is leading to this major fall in commodity prices. According to Johnson Matthey Plc, the country accounts for atleast 23 percent of global demand for platinum and palladium.

Glut

The metals, that have been hit weak demand, are facing a double whammy in the form of oversupply. The World Platinum Investment Council, in a report, said it expects production from South Africa, that accounts for more than 70 percent of the global output, to rise 30 percent in 2015 from last year. Mine production slumped in 2014 due to a five-month strike in South Africa.

Brokerage house Goldman Sachs, too expects to see a significant rise in production. Platinum production, according to it, could rise by an additional 500,000 ounces per year by 2018, and a total of 1.2 million ounces per year by 2020.

What may make matters worse for the metal is the expectation of a US Fed rate hike that will find more investors avoiding the precious metals.(Written by Ritika Dange)