Palladium Price Today

What is palladium used for?

Unlike gold or silver, palladium has minimal monetary history. Its value is almost entirely industrial. Roughly 85% of annual palladium demand comes from catalytic converters in gasoline-powered vehicles. The three-way catalytic converter in modern petrol cars uses palladium (sometimes alongside platinum and rhodium) to convert carbon monoxide, hydrocarbons, and nitrogen oxides into less harmful emissions.

Tighter emissions regulations — Euro 6 in Europe, China 6 in China, Tier 3 in the US — increased the amount of palladium required per vehicle throughout the 2010s, driving sustained demand growth even as production volumes were relatively flat. This mismatch between supply and demand produced the dramatic price spike from ~$500/oz in 2016 to nearly $3,000/oz in 2022.

The EV headwind

Electric vehicles require no catalytic converters and therefore no palladium. As EV market share grows globally, long-term palladium demand from automotive manufacturers is expected to decline. The rate of this decline depends on how quickly EV adoption displaces internal-combustion engine (ICE) vehicles, which varies significantly by region. China and Europe are transitioning faster than the US.

The palladium price correction from its 2022 peak reflects the market pricing in this structural headwind alongside an easing of the supply deficit that drove prices higher.

Supply: Russia and South Africa

Russia, primarily through Nornickel (Norilsk Nickel), produces approximately 40% of global palladium supply. South Africa produces most of the remainder. This extreme supply concentration means geopolitical events — sanctions, export restrictions, mine disruptions — can cause sharp, rapid price moves independent of demand fundamentals.

Palladium is primarily mined as a byproduct of nickel and platinum mining, which means producers cannot easily ramp up palladium output independently. This supply inelasticity amplified the price spike when demand surged, and limits how quickly new supply can respond to price signals.

Palladium vs. platinum substitution

Automakers have long been aware of the cost risk from palladium concentration and have invested in research to substitute platinum for palladium in gasoline catalysts. This substitution is technically feasible but requires significant retooling of catalyst chemistry. If palladium prices remain elevated relative to platinum for an extended period, thrifting (using less palladium per vehicle) and platinum substitution could reduce palladium demand — a self-correcting mechanism that the market watches closely.