Canadian SouthernEra Resources Ltd, North American's largest platinum producer, has voiced optimism regarding the immediate future of palladium, but predicted a 'mild cooling off' for platinum, according to Reuters.

President and chief executive Patrick Evans said that, even though palladium had increased in price by 60 per cent since April, its comparative cheapness at nearly $500 less than platinum per ounce made it an attractive option alternative for carmakers.

'We have just seen the start of a good run in palladium', he said. 'Provided there is no erratic activity by the Russians, we see the palladium rally continuing.'

He put a realistic price for palladium at between $300 and $350 an ounce, a far cry from the $1,000 and more being paid in 2001 before unreliable Russian supply led carmakers to switch to the then cheaper and more reliable platinum.

Mr Evans added that at least a million ounces of pgms used by the auto industry each year could be shifted between platinum and palladium. Moving to palladium could, he said, save carmakers $500 million a year.

He said he expected platinum to slip back to below $700 an ounce, following last week's 23-year high of $714 an ounce, in response to a palladium comeback.