Hopes of a recovery in palladium, which reached a price of $1,000 an ounce at the start of the decade when the dominant producer, Russia, squeezed supply, are being raised by a predicted increase in demand for the pgm from industry, according to the Mining Weekly.

By December 2002, people had become so inured to the difficulty in obtaining the metal that big users had found substitute materials, causing the price to collapse to $222. It has remained in the doldrums ever since.

Impala Platinum marketing executive Derek Engelbrecht predicts a more general stabilisation of demand, as the cost of platinum encourages catalyst makers to rethink their aversion to palladium.

Platinum number one Anglo American's commercial executive director, Sandy Wood, sees potential in new uses. 'Since there is an oversupply of the metal, the best solution is to develop industrial uses of palladium, as this would stimulate demand', he said.

'We are in the early stages of developing industrial uses of palladium', a commercial strategy that Mr Engelbrecht confirmed is also being pursued by Impala.

Analysts such as Barclay Capital's Ingrid Sternby share these producers' optimism, having looked at the markets:

'There has been fresh buying in anticipation that the wide price spread in place between palladium and platinum will narrow', she told Reuters.

Societe Generale metals expert Stephen Briggs concurred with the view that rising demand from current markets would augment that caused by the development of new uses.

He said that 'with platinum so incredibly strong, it is becoming certain that there will be more switching back into palladium. Prospects for palladium demand look quite attractive.'