2025 Palladium Trading: What's Driving the Precious Metal Market?

Palladium has undergone a significant decline since peaking at US$3,002 per ounce in February 2022. Throughout 2024, the metal largely consolidated between US$900 and US$1,100, with a brief jump to US$1,200 in October amid geopolitical tensions affecting Russian supplies—Russia being a major global source of palladium and related platinum-group metals.

The Auto Sector Dilemma

The automotive industry consumes roughly 80 percent of global palladium demand, primarily for catalytic converter manufacturing. While light vehicle production is projected to reach 89.6 million units in 2025 (a 1.7 percent increase), the composition of this production matters more than volume.

Electric vehicles, now capturing an expected 16.7 percent market share in 2025 (up from 13.2 percent in 2024), require zero palladium. This structural shift creates a headwind for the metal despite steady overall car sales. Market saturation, charging infrastructure concerns, and range anxiety continue to slow EV adoption rates, but the trajectory remains upward—gradually eroding palladium’s primary demand source.

Supply Surge Coming

The World Platinum Investment Council forecasts a critical shift: palladium transitions from deficit to surplus in 2025, with oversupply potentially reaching 897,000 ounces. This stems from two sources: a projected 1.2 million ounce jump in recycled material and a recovery in output from Russian and South African mines returning to historical production levels.

Auto sector demand itself is anticipated to grow modestly to 8.5 million ounces—still below pre-COVID highs of 9 million ounces. Jewelry and industrial applications are expected to contract further.

Palladium Trading Outlook: Range-Bound Consolidation

CPM Group’s managing partner Jeffrey Christian predicts palladium will trade sideways in 2025 with a downward bias, positioning the metal in a US$900 to US$1,000 range. Heraeus Precious Metals offers a slightly wider band: US$800 to US$1,200, reflecting combined pressures from rising supply and weakening demand.

This consensus suggests 2025 will be characterized by subdued price action. The fundamental backdrop—supply surplus meeting structural demand erosion from electrification—supports trading in lower ranges compared to 2022-2023 peaks. For palladium trading participants, positioning should account for this consolidation environment rather than expecting directional breakouts.