Palladium, a precious metal used primarily in catalytic converters, experienced a price peak in February 2022 but has since seen a decline. The automotive sector is a key driver of palladium demand, with over 80 percent of its usage attributed to this industry. However, due to its high cost, there has been a shift towards substituting palladium with platinum, which is currently more affordable.
In 2024, palladium traded within the range of US$900 to US$1,100 per ounce, with a brief spike to US$1,200 following the US government’s call for stricter sanctions on Russian precious metals. Russia, a major supplier of palladium, plays a significant role in the global market for this metal.
Looking ahead to 2025, industry experts foresee a relatively stable but downward-trending price trajectory for palladium. Jeffrey Christian, a leading voice in the sector, anticipates that both platinum and palladium prices will remain rangebound, with palladium facing a more pronounced downward pressure due to weakening demand from traditional automotive applications.
While the automotive sector is expected to witness a modest increase in sales volume in 2025, the rise of electric vehicles poses a challenge to palladium demand. The shift towards electric mobility is gradually reducing the need for palladium in catalytic converters, thus impacting the metal’s market dynamics.
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Moreover, policy changes proposed by the incoming administration could further influence the automotive industry. Potential tariffs on key trading partners and the elimination of EV subsidies may disrupt the market, affecting demand for both traditional and electric vehicles.
Supply and demand dynamics also play a crucial role in shaping the palladium market. The World Platinum Investment Council predicts a surplus in the palladium market by 2025, driven by increased recycling supply and higher output from major mining regions like Russia and South Africa.
Industry reports suggest that the palladium price in 2025 is likely to range between US$800 and US$1,200 per ounce, reflecting the anticipated oversupply and subdued demand conditions. This consensus underscores the prevailing sentiment that the palladium market is poised to be weaker in the coming year.
As the industry navigates through evolving market conditions and regulatory changes, stakeholders are advised to stay informed about the latest developments and trends in the palladium sector to make informed investment decisions.
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