Strong Demand Decline: Palladium Sector under Pressure

Difficult times are looming for the palladium sector. The market for this precious metal, which is also widely used in the automotive industry, had developed a supply deficit each year from 2012 to 2024. However, experts predict that the market will find a balance this year.

According to catalytic converter manufacturer Johnson Matthey, a 6% decline in demand is expected, largely due to the decreasing production of gasoline-powered automobiles and an increase in recycling volume in China.

US Trade Policy Causes Great Uncertainty

Overall, the demand outlook for platinum, palladium, and rhodium this year is extremely uncertain, as US tariff policies and countermeasures by affected countries could lead to the use of these Platinum Group Metals (PGM) in the automotive sector and industry falling short of forecasts.

Johnson Matthey already expects a 5% decline in PGM use in automotive catalysts for 2025. However, if US tariffs lead to a decrease in automobile production, this decline could be even greater, they said.

Regarding palladium, it is expected that the robust growth of recycling in China’s automotive industry will increase the secondary supply by 4%, even if recycling is weaker in other regions. This, in turn, will offset an expected 4% decline in mine supply from South Africa and the US, according to Johnson Matthey.

Platinum Market Deficit Continues

As for platinum, Johnson Matthey expects the third consecutive annual market deficit – mainly because mine supply is expected to fall by 3% due to output restrictions in South Africa and low supply from recycling (except in China), according to experts.

After platinum use in automobiles reached a 16-year high in 2024, it is predicted to decline by 5% this year. The reason given is that electric vehicles are making up a larger portion of the market – for both passenger cars and trucks.

For rhodium, another supply deficit is likely, according to Johnson Matthey, as both supply and demand are expected to decrease by 1% due to low mine supply and weaker automotive demand.

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