By Risa Maeda
TOKYO, May 13 (Reuters) - Demand for platinum from Japan's car industry rose 20 percent in 2012 thanks to a recovery in production but both look set to fall back this year, platinum specialist and refiner Johnson Matthey Inc said in its annual report.
Japanese car manufacturers account for around 10 percent of the world's gross platinum demand and about a half of the country's own demand. They used a total of 600,000 ounces last year, helped by a recovery from the country's 2011 tsunami.
Demand for palladium in autocatalyst use also rose 15 percent to 785,000 ounces last year, helping to raise the country's total palladium demand by 9 percent to 2,055,000 ounces during the same period.
'Japanese production of gasoline cars and light trucks is expected to decline this year following the impressive growth in 2012,' Johnson Matthey said in the report.
Unlike in Europe, where platinum is mainly used for diesel engine vehicles, gasoline cars built in Japan still use platinum in the catalyst mix.
In 2012, Japan's overall platinum demand fell 13 percent, outpacing a 0.6 percent decline in global demand due to the broad weakness of the capital market in platinum bars, which allows investors to use platinum as a tradable asset.
Japanese gross platinum demand accounted for more than 20 percent of global gross platinum demand in 2008, but that fell to 14 percent, or 1,140,000 ounces, last year as the appetite for the metal in other economies including China grew rapidly.
Johnson Matthey didn't provide detailed forecasts on Japan's platinum demand for 2013, including how far the country's autocatalyst use will likely fall.
Japan's main auto industry body has said it expects vehicle sales in Japan to drop 11.7 percent year-on-year in 2013 to about 4.74 million units.
The Japanese government's massive stimulus programme has helped push the yen down by around 16 percent against the dollar so far this year, however, and that may prop up car exports.
The world's best-selling carmaker Toyota Motor Corp said this week it will maintain production levels at 3 million vehicles a year in Japan.
Jewellery demand in Japan has stagnated in recent years from when it was a top platinum jewellery market in the 1980s and in 2012 accounted to less than one-sixth of China's 1,950,000 ounces.
As for the platinum bar market, Japanese investors tend to buy in a falling price environment and sell on price upturns, a tendency which was also seen in 2012, the report said.
Their investments fell to 100,000 ounces from 250,000 ounces a year earlier as a rally in the yen price of platinum toward the end of 2012, aided by the falling yen, gave some investors a chance to sell.
Platinum prices in Tokyo hit an almost three-year high of 5,300 yen per gram in February. They are now about 7 percent below that level.
(Reporting by Risa Maeda; Editing by Aaron Sheldrick and Patrick Graham) Keywords: PLATINUM WEEK JAPAN/DEMAND
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