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Platinum Market Update: Analyzing Recent Price Surge
While gold and silver dominate most precious metals headlines, palladium continues to move largely under the radar. Yet, as Jeffrey Christian, Managing Partner of CPM Group, notes, the current environment in palladium may offer compelling intermediate-term opportunities—especially in what he describes as a “hostile economic environment for financial assets.”
Palladium prices soared into 2021–2022 before correcting sharply. Since late 2023, the market has been consolidating, setting up what may be the next phase of price volatility and potential upside for investors who understand the underlying fundamentals.
Recent Price Action: From Trading Range to Sharp Spike
For much of the period from late 2023 into mid-2024, palladium traded in a relatively well-defined range, with prices oscillating between roughly $800–$900 on the downside and around $1,100 on the upside.
In June and July, that calm broke. Palladium prices spiked, briefly pushing above $1,300 per ounce, a move of roughly 30% from the lower end of the trading range. Since then, prices have eased back, recently hovering around $1,170, with CPM Group expecting the market could soften further before offering a better entry point.
According to Christian, investors who are patient and look for a pullback into the $1,050–$1,000 or even $950 area may be positioned to benefit from future spikes similar to the one seen in early summer.
Supply Under Pressure: Sub-Economic Mines and Curtailments
On the supply side, palladium production is facing mounting pressure.
Mine output has already been declining, and at current prices some operations are simply not economic. One notable example is the Stillwater mine in Montana, owned by Sibanye-Stillwater, which has placed one of its mines on care and maintenance and may ultimately close it because it cannot operate profitably around $1,100 per ounce.
This is not an isolated story. As prices remain relatively low compared to prior peaks, more producers are scaling back production, deferring projects, or shutting capacity. Over time, this tightening of primary supply can have a profound impact on market balances.
Demand Anchored by the Auto Industry
Palladium demand remains heavily concentrated in the automotive sector, primarily for use in catalytic converters to reduce emissions.
Despite cyclical and structural challenges in the auto industry, global auto demand has held up relatively well, providing ongoing support for palladium fabrication demand. As Christian explains, the near-term outlook for palladium hinges on a simple question:
Which falls faster—mine production or auto demand?
So far, auto demand has proven resilient, while mine production is clearly under pressure.
From Surplus to Potential Deficit
In recent years, the palladium market has been in surplus. However, that surplus has been shrinking:
The surplus was relatively large a few years ago.
It narrowed significantly last year.
It is expected to be even smaller this year.
Looking ahead, CPM Group sees a realistic path to a “relatively sizable deficit” emerging as early as next year, assuming the auto industry remains broadly intact and mine curtailments continue or deepen.
A shrinking surplus transitioning into deficit, against the backdrop of earlier price compression, sets the stage for renewed price strength.
