Demand for palladium in dental alloys is forecast to increase slightly to 730,000 oz. in 2002. The fall in the palladium price from its early 2001 peak has had a stabilizing effect on demand, but there is little evidence that palladium will be able to regain a significant proportion of the markets lost to alternative materials in recent years.
Japanese dental demand for palladium is largely independent of price and should grow marginally to 480,000 oz. in 2002. The government-backed subsidy for dental treatment using a 20% palladium alloy has underpinned consumption, though spending on dental treatment as a whole is down as a result of the weakness of the economy.
Europe has seen a strong move away from the use of palladium alloys to alternative dental materials over the past three years. Rising and volatile prices have slashed palladium demand from a consistent level of around 250,000 oz. per year in the mid-1990s to an estimated 45,000 oz. in 2002.
The substitution of palladium for high-gold alloys and ceramic alternatives has required considerable investment in equipment and training. Consequently, the European dental industry has shown little inclination to move back to palladium-based products.
In North America, however, the recent fall in the palladium price is expected to spur a small increase in the use of the metal in dental alloys to 195,000 oz.
Although the substitution of palladium has not been as widespread in the U.S. as in Europe, consumption this year will still be less than half the level of demand five years ago.
— The preceding is an excerpt from Platinum 2002: Interim Review of PGM Markets, published by London-based Johnson Matthey.
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