The palladium market, which was in a deficit in 2012-2024, will move into balance this year, with demand falling by 6% amid lower production of gasoline vehicles and increased recycling in China, Johnson Matthey said in a report.
The 2025 demand outlook for platinum group metals (PGMs) – platinum, palladium, and rhodium – is highly uncertain as the impact of US import tariffs and retaliatory measures by other countries could see PGM use in auto and industrial applications fall short of forecasts, the autocatalyst maker added.
“We are already expecting PGM use on vehicles to fall by 5% this year, but there is a further downside risk if tariffs result in cuts to vehicle production. Lower car sales could also reduce the number of older vehicles being scrapped, cutting secondary supply,” said Rupen Raithatha, market research director at Johnson Matthey.
The three metals are used in autocatalysts that reduce emissions from vehicle engines, with platinum also used in the jewellery sector.
For palladium, robust growth in Chinese automotive recycling will boost secondary supply by 4%, despite weak scrap volumes in other regions. This will offset a 4% reduction in supplies from mines in South Africa and the United States, Johnson Matthey forecast.
Meanwhile, lower production of gasoline vehicles is expected to cut the auto sector’s palladium demand and affect investment demand as well.
For platinum, Johnson Matthey expects a third year of significant market deficit, with mine supply falling by 3% due to constraints in South African output and secondary supply depressed in all regions except China.
Automotive platinum use is forecast to contract by 5% from a sixteen-year high in 2024 as battery electric vehicles take market share in both car and truck markets.
For rhodium, Johnson Matthey forecasts another year of deficit with both supply and demand falling by 1%, under pressure from lower mine supply and lower auto consumption.
(By Polina Devitt; Editing by Mark Potter)
