By Halia Pavliva Dec. 3 (Bloomberg) -- Platinum fell for the third straight day in New York on concerns industrial demand for the metal will drop as auto sales decline and the biggest U.S. carmakers seek government loans to avert collapse. Palladium rose. General Motors Corp. and Chrysler LLC today told the U.S. Congress they need $11 billion in federal funds just to survive this month. Democrats vowed to keep them from bankruptcy, without saying how. In November, cars and light trucks sold at the lowest annual rate in 26 years. Platinum, used mostly in catalytic converters in automobile engines, has plunged 65 percent from a record $2308.80 an ounce in March. “We are not seeing any real consumer demand,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said today in an e-mailed note. “Fundamentally, platinum is very weak.” Platinum futures for January delivery fell $2.20, or 0.3 percent, to $805.10 an ounce on the New York Mercantile Exchange. The price gained 6.1 percent in November, snapping a four-month slide. Still, the most-active has lost 47 percent this year. Palladium futures for March delivery rose 55 cents, or 0.3 percent, to $174.25 an ounce in New York. The price dropped 2.7 percent in November, the fifth straight monthly decline,strq and has fallen 54 percent this year. “Disastrous slides in auto sales in recent weeks have put a damper on the outlook for noble metals,” Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a report. Falling Auto Sales Overall, U.S. auto sales plunged 37 percent in November from a year earlier. The declines ranged from 47 percent at Chrysler and 41 percent at GM to 31 percent at Ford Motor Co. Toyota Motor Corp. and Honda Motor Co. also posted drops, of 34 percent and 32 percent, respectively. Automakers account for more than 60 percent of global platinum consumption, according to estimates by Johnson Matthey Plc, a London-based metals refiner, trader and researcher. Palladium is also used to make catalytic converters. Jewelry manufacturers also use both metals. Democrats, who lead the House of Representatives and the Senate, have said they intend to help U.S. automakers stave off bankruptcy. President George W. Bush has resisted using any of the billions of dollars set aside for helping financial companies weather the credit crisis. Democrats favor using those funds, while Republicans prefer to tap an earlier Energy Department program. $34 Billion Requested The automakers’ aid requests delivered yesterday to U.S. lawmakers total $34 billion, more than a third larger than the plans they set aside last month, and heighten the pressure for action as a deepening auto slump threatens to magnify the effects of a recession that began almost a year ago. “Keep your seatbelt on, because volatility will probably grow as no one knows when the next shoe will drop and how hard,” Perez-Santalla said. “Fundamentals continue to be important as the lack of demand is still very apparent but the inflationary action will help buoy the prices.” U.S. car and light-truck sales have dropped for 13 straight months compared with year-earlier results, the longest slide in 17 years. The U.S. is the world’s biggest auto market. Consumer Prices Fall The U.S. Consumer Price Index plunged 1 percent in October, the most since records began to be kept in 1947, according to the Labor Department. Federal Reserve policy makers predicted the U.S. economy will contract until the middle of next year, with some officials concerned about the risks of deflation, according to minutes of their Oct. 28-29 meeting. “Because of what is perceived as deflation creeping into the economy, the talk is that the Fed will start releasing more cash into the market,” Perez-Santalla said. “I am starting to believe we may have seen lows on the industrial based metals for now and it should hold these levels.” Some investors buy platinum and palladium, priced in dollars, to preserve value when the currency falls, and sell the metals when it rises. The dollar strengthened today, as economists forecast a cut tomorrow by the European Central Bank, by a half-percentage point to 2.75 percent in its benchmark financing rate. To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.

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