Palladium Price Forecast 2024, 2025, and 2030: Will Palladium Outshine Platinum Again?

Before 2024, palladium maintained its premium over platinum, its sister metal in the Platinum Group Metals (PGM). The shiny, silvery metal even surpassed gold for the first time in mid-January 2019, becoming the most expensive precious metal.

But as they say, nothing lasts forever. In the past two years, since reaching an all-time high of over $3,400, palladium has lost its upper hand, dropping below platinum in February this year.

Alongside platinum, palladium has borne the brunt of the growing penetration of battery electric vehicles and a lackluster automobile industry. Both metals are used in catalytic converters in petrol and diesel vehicles to reduce harmful carbon dioxide emissions.

What is the future of palladium as the global push for a decarbonized economy accelerates in the transportation sector? Will it be able to recoup its losses?

Let’s explore analysts’ and experts’ views on the metal and the factors driving the palladium price forecast.

Table of Contents Table of Contents

1. Key Takeaways
2. Platinum Future Price Predictions Summary
3. Palladium Price in 2023: Weak Auto Sales, Recession Weighs Down Price
4. Drivers Shaping Palladium Price Trends in 2024
5. Palladium Price Forecast 2024
6. Palladium Price Prediction 2025
7. Palladium Price Prediction 2030
8. The Bottom Line
9. FAQs
10. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. Platinum Future Price Predictions Summary
3. Palladium Price in 2023: Weak Auto Sales, Recession Weighs Down Price
Show Full Guide
4. Drivers Shaping Palladium Price Trends in 2024
5. Palladium Price Forecast 2024
6. Palladium Price Prediction 2025
7. Palladium Price Prediction 2030
8. The Bottom Line
9. FAQs
10. References

Platinum Future Price Predictions Summary

Palladium Price in 2023: Weak Auto Sales, Recession Weighs Down Price

Softening auto catalyst demand and rising electric vehicle (EV) sales were the main drags on palladium throughout 2023.

Despite a rebound in global auto production last year, palladium prices continued to decline in 2023 due to weakening demand. This is partly because consumers continued to switch to using platinum, particularly as palladium prices peaked at a record of $3,440.76 in March 2022 following Russia’s invasion of Ukraine. Russia accounts for 40% of the global palladium mine supply.

Furthermore, sales of battery electric vehicles (BEVs) and hybrid cars continued to increase, reducing the market share of petrol vehicles, which is the main source of palladium demand.

According to the International Energy Agency (IEA), EVs accounted for 18% of global car sales in 2023, up from 14% in 2022. In terms of volume, nearly 14 million electric cars were sold last year, an increase of 3.5 million from 2022.

Overall, palladium prices fell more than 34% in 2023, from $1,659 per ounce in early January to $1,109/oz at the end of December. In 2022, palladium prices declined by 5.7%.

Drivers Shaping Palladium Price Trends in 2024

In 2024, palladium has yet to show any meaningful signs of recovery. In palladium price news, Reuters reported that on February 9, palladium value even dropped below platinum for the first time since 2018. Palladium was traded at $869.4/oz compared to platinum at $878 on that day.

At the time of writing on August 26, palladium was trading at around $953/oz, dropping nearly 14% year-to-date.

Before we look into palladium price predictions for 2024 and beyond, let’s look into factors that will affect palladium prices for the remainder of the year.

Sustained Supply Deficit

The World Platinum Investment Council (WPIC) in its latest platinum supply-demand balance outlook in May, projected that the palladium market will remain in deficit for a third-year in a row.

Global palladium supply – mine supply and secondary supply from recycling – was expected to reach 8.74moz in 2024, lagging behind demand that was estimated to reach 10moz.

Palladium supply for this year will also decrease by nearly 3% from 9.00moz in 2024. The drop in global palladium supply is due to an expected 6% decline in total mining supply as Norilsk Nickel (Nornickel) postponed planned maintenance of the Nadezhda furnace into 2024, according to WPIC.

Nornickel, the world’s largest palladium producer, announced in June that it was installing a new furnace at the Nadezhda smelter which would take 60 days to complete the work. According to Reuters, the development of the new furnace was delayed for two years due to Western sanctions over Russia’s war in Ukraine.

WPIC said in the note:

“Despite 2024 representing a third consecutive deficit (and the third largest in the previous 10-years), an extreme level of net short positions in the futures markets suggest the market believes above ground stocks are sufficient to fill the supply/demand balances at current prices.”

However, the expected decline in mine supply offsets a 6% rise in secondary supply from recycling, maintaining a market deficit amid an anticipated fall in demand from the automotive industry.

Following a strong performance in 2023 driven by post-pandemic pent-up demand, analysts expected a slowdown in global vehicle production. Meanwhile, according to the International Organization of Motor Vehicle Manufacturers (OICA), global car production rose 10% to 93.54 million cars in 2023 from 85.01 in 2022. Car sales also increased by 11.8% to 92.72 million cars in 2023 from 82.87 million in 2022.

Dutch lender ING has trimmed its full-year 2024 car sales growth expectation to 1.8% from 2.6% previously.

Oleksiy Soroka, ING’s Senior High Yield Credit Strategist, and Rico Luman, Senior Sector Economist, Transport and Logistics, said in a note on August 6:

“We envisage a further deceleration in car sales growth during the second half of this year. This is in part due to consumer demand becoming more muted after a post-Covid catch-up phase, but also the mixed economic environment and continuously elevated interest rates alongside uncertainty surrounding both policy and political developments across the globe.”

In addition, they said that used cars have become increasingly attractive again after prices started to drop following better stock positions.

Palladium-to-Platinum Switch to Stay

Palladium and its sister metal, platinum, can substitute for each other because they can both be used in catalytic converters. Since 2019, automakers have been switching to platinum instead of palladium, as the latter has generally been more expensive than platinum.

However, even though palladium prices have reached parity with, if not become cheaper than, platinum, ANZ Research analysts Daniel Hynes and Soni Kumari stated in a note on June 11 that the palladium-to-platinum substitution will continue.

This is partly because vehicle designs, including the choice of Platinum Group Metals (PGMs) used, take at least seven years to change.

“So we expect platinum to benefit from additional substitution demand until 2026. The auto catalytic demand ratio for Pd-to-Pt is still above 2.6 against the ratio of 2 in 2013, so there is still room for more substitution,” they said.

The palladium-to-platinum ratio shows palladium value relative to platinum. A higher palladium-to-platinum ratio means that palladium is more expensive than platinum. On the flip side, a lower ratio shows platinum is more expensive than palladium.

In its May forecast, WPIC expected the palladium-to-platinum may see a reverse in 2026 when the market hit a surplus.

“We anticipate that when palladium markets shift into surplus, there will be an increase in availability, leading to economic incentives for substituting platinum for palladium. The extent of reverse substitution will vary regionally and be influenced by regulation and automaker supply chain risk management,” WPIC said in the note.

Delay in New Emission Regulations

The European Parliament’s decision to delay the implementation of stricter emission standards for vehicles, the Euro 7, have impacted automotive palladium demand, according to WPIC. The EU had initially planned to impose the Euro 7 in 2025, but it decided to postpone it to 2031.

The delay means the demand for palladium from the automotive sector could decrease because automakers don’t need to increase the amount of palladium in their vehicles as soon as expected.

“Euro 7 regulations prioritize CO2 reduction, which may be achieved through a higher proportion of battery electric vehicles (BEVs) and hybrids rather than targeting reductions in NOx, HC, and CO emissions that require increased PGM loadings; road testing limits for these have remained unchanged,” WPIC said in the note.

Adding to that, the delay and softening of Euro 7 implementation could also affect palladium use in other regions, as global automakers may adjust their palladium usage strategies based on the less stringent European requirements.

According to WPIC, about 40% of production output in the “rest of the world” conforms to Euro 6 standards, and these nations typically upgrade their standards when a new one is released.

“Consequently, for such a small change, countries adhering to Euro 6 standards may either delay their emissions standard revisions or opt not to revise them at all,” the group said.

It added that Platinum Group Metals (PGM) loadings increase by 5% to 20% when new emission regulations are introduced, WPIC said.

“Considering the roughly 10 million Euro 6 standard vehicles produced in the rest of the world, this could translate to a significant opportunity loss in palladium demand, exceeding 100 koz annually,” according to the group.

Palladium Price Forecast 2024

ANZ Research’s palladium price forecast for 2024 on August 23 expected the metal price to fall to $983/oz from $1,315/oz estimated in 2023.

ANZ Research said:

“Platinum regained its premium over palladium, driven by its growing use in auto catalysts for gasoline-powered cars. Higher above-ground inventories are capping gains in platinum. Palladium prices continued to trade under USD1,000/oz due to its auto catalyst demand loss and rising EV sales.”

Economic data provider Trading Economics predicted palladium prices to drop until the end of the year. It estimated the metal to trade at $823.76/oz in Q3 before dropping to $798.78/oz in the final quarter of 2024.

On the other hand, sixteen out of 25 analysts polled by the London Bullion Market Association (LBMA), projected that palladium could trade above $1,000 in 2024 but remain lower than the level in 2022.

Peter Fertig, QCR Quantitative Commodity Research Ltd., who gives the highest palladium price forecast in the poll, said:

“The car industry did not provide the expected support to push prices higher. The demand from this sector could remain subdued during the first half. However, with central banks lowering interest rates, new car sales are likely to recover. Thus, a stabilization appears the most likely scenario, but in 2024, the average price is probably again lower compared to the previous year.”

Fitch Ratings, which provided a palladium price forecast for the first time, projected the metal to trade at $1,050 in 2024.

Daria Efanova, head of research at London-based Sucden Financial, in a webinar on July 17, expected the palladium price to remain quite low for the following quarters this year due to low physical demand from the automotive sector. Adding to that, palladium does not see rising demand from the jewelery sector, where consumers are looking for alternatives to gold and silver.

“Given that the silver/gold prices have been quite high, we notice people are transitioning from gold and silver to more platinum use in the jewelry, which provides a bit more support to platinum than it is to palladium, which doesn’t benefit from the jewelry standpoint. So, from that point on, we expect the palladium-to-platinum ratio to equalize a bit.”

Palladium Price Prediction 2025

For 2025, the palladium price trend is mixed. ANZ Research forecasted palladium prices to increase to $1,080/oz, up from an estimated $983 in 2024.

In contrast, Trading Economics’ palladium price projections show the metal could continue its downtrend, trading lower at $774.57/oz in Q1 2025 compared to $798.78/oz expected in Q4 2024 as of August 27. The data provider expected palladium prices to drop further to $751.13/oz in Q2 2025.

Meanwhile, Fitch Ratings’ palladium price forecast for 2025 saw the metal’s price remain unchanged at $1,050 from its 2024 level.

Palladium Price Prediction 2030

There are very few analysts providing palladium price predictions for the next five years due to multiple unpredictable factors, including the pace of EV adoption and the availability of supply.

Fitch Ratings’ long-term palladium price forecast, released in June, was only available until 2027. It predicts that the metal will stabilize at the $1,050/oz level in 2026 and 2027 as producers are expected to complete releasing stocks that piled up at the start of Russia’s war in Ukraine in February 2022.

LongForecast also does not offer palladium price prediction for 2030 as of August 27, 2024. The economic forecast agency predicted palladium prices to extend its fall to $617 in September 2028, up from $584/oz in December 2026 but it would be about 34% lower than the price in December 2024 at $936.

The World Platinum Investment Council (WPIC) does not provide palladium price expectations, but it offers an outlook into the future of palladium supply and demand balance beyond 2025.

In 2026, WPIC expects the palladium market to tip into surplus after experiencing a deficit in 2024 and 2026, with the surplus predicted to grow in the following years.

The growing surplus will be primarily driven by an increase in recycling supply as the retirement of gasoline-based vehicles accelerates in Western countries, including the U.S. and China. In particular, China’s vehicle recycling rates are predicted to increase by 75% over the forecast period. This will boost the supply of recycled auto scrap by 2.2 times, from 199,000 ounces of palladium in 2023 to 443,000 ounces in 2028.

“This in part reflects an increase in the end-of-life vehicles coming through in China now having emissions control systems containing meaningful levels of PGMs, mainly palladium. There are strategic reasons for growing recycling in China, offering cost and emission advantages over primary supply,” WPIC said in its outlook released in May 2024.

On the demand side, palladium demand from the auto sector is expected to remain resilient. Although the market share of PGMs-rich internal combustion engines (ICE) will continue to decline over the forecast period, the rate of decline will be slower at a 1.7% compound annual growth rate (CAGR). This is partly due to the slow adoption of battery electric vehicles (BEVs) and the growing use of hybrid vehicles, which will be offset by slower emission reduction.

WIPC said:

“By 2028, we forecast global BEV light-duty market penetration to reach 25%. As PGM catalyst-containing vehicles make up the majority of the balance, this translates into a higher for longer PGM demand outlook. This means that the received market wisdom that palladium demand is going to decline rapidly appears very much overstated.”

The Bottom Line

Palladium prices could potentially rebound to above $1,000/oz in 2024 and 2025, but a growing surplus and declining demand pose a downside risk for the metal starting in 2026.

While electric vehicles are expected to gradually erode the market share of fossil fuel-based vehicles, consumers’ hesitation to fully switch to EVs, opting for hybrid cars instead, could slow the decline of internal combustion engines (ICE).

This means ICE vehicles may remain on the road longer than expected, continuing to support positive palladium price expectations.

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