Demand in Russia for palladium is expected to rise over the next decade, although there will not be a major spike in the short-term, experts say.

Johnson Matthey predicts that the next three years will see a modest rise in demand internally, but that it will not have an effect on palladium supplies from industry giant Norilsk Nickel.

Despite increased demand for palladium in catalytic convertors, Russia is only expected to begin drawing significant amounts of the platinum group metal from around 2009 onwards.

This is expected to take shape as increasingly stringent emission laws drive up the clean vehicle market, as JM's Moscow manager Mikhail Piskulov explained to Reuters.

"There will be more internal consumption," he said.

"It won't make a dramatic difference at this stage but when more stringent regulation comes into force in Russia, there will be more demand."

Russia is lagging behind some of Europe's more developed clean automotive markets, but the government has approved the Euro III regulations, which will take effect from the start of April.

From 2008 it is thought the country will move on to Euro IV, tightening the emission standards once more and driving demand for autocatalysts up.

Russia's Norilsk Nickel is the world's largest producer of palladium.


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