Palladium Retreats Further from 1-Year Highs
Palladium futures have dropped to around $1,120 per ounce, down from a one-year high of $1,338 on July 23rd. This decline is attributed to a weakening automotive sector due to rising electric vehicle adoption and the use of cheaper platinum in catalytic converters. The World Platinum Investment Council anticipates a market surplus of 200,000 ounces by 2025, as steady supply meets declining automotive demand. The ongoing reduction in demand from fossil-fuel engines leaves palladium prices susceptible to further declines without new demand sources.
Palladium futures fell toward $1,120 per ounce, extending their retreat from the one-year high of $1,338 reached on July 23rd, as a changing automotive landscape and shifting supply dynamics eroded the metal’s once-tight market.
Auto manufacturing, responsible for roughly 80–84% of palladium demand, has weakened amid accelerating electric vehicle adoption and increased substitution of cheaper platinum in catalytic converters.
Concurrently, the World Platinum Investment Council projects the market will shift from a multiyear deficit to a surplus of about 200,000 ounces in 2025, as mine and recycled supply remain steady while automotive demand contracts.
While speculative activity and short positioning have contributed to volatility, the deeper driver is the ongoing erosion of demand from traditional fossil-fuel engine applications, leaving prices vulnerable to further declines unless a new or revitalized demand source emerges.
