Falling sales in the automobile industry during the first half of 2011 has led to concern in the previous metal industry about a potential fall in demand for metals like platinum, silver and palladium.

An enormous 57% of demand for palladium comes from the automobile industry, leading to concerns of a drop. It is used mostly in catalytic converters, along with platinum. Silver, on the other hand, is used in semi-conductors.

However analysts are urging industry workers not to panic as the car sales industry is expected to bounce back during the second half of the year. However in total it is likely that all three metals will end up seeing a shortfall in demand.

Barclays claim that “Across the precious metals in tonnage terms, silver suffers the greatest loss, but this represents less than a tenth of 1% of global silver demand whereas palladium, the metal market most heavily skewed towards the transport sector, suffers a loss of 0.4%.”