Nornickel Pursues New Uses to Offset Palladium Demand Drop

Nornickel, the world’s leading palladium producer, is aiming to counter declining demand from internal combustion engine vehicles by developing innovative applications for the metal. The company expects annual palladium demand in China to increase by 5-10 tonnes (7.6-15% of current consumption) from 2026-2027 through these efforts. Currently, over 80% of global palladium use comes from catalytic converters in traditional vehicles—a sector facing contraction due to the global shift toward electric vehicles.

To address this decline, Nornickel is collaborating with scientists and industrial partners to test and develop new palladium applications. These include technologies for hydrogen production, water purification, biofuels, solar energy, and more. Pilot programs are already underway with research institutions and industry partners in Russia and China.

Vitaly Busko, Nornickel’s Vice President of Innovation, recently showcased these initiatives at a conference in China, emphasizing their potential to generate an additional 15 tonnes of annual palladium demand by 2030. He noted that China, which consumed 66 tonnes of palladium in 2023 (22% of global demand), is expected to lead this growth, particularly in emerging sectors such as hydrogen production and advanced water treatment.

Hydrogen-related technologies alone could contribute an additional 7-10 tonnes of annual demand, according to Nornickel’s estimates. Other promising uses include electrodes for water disinfection, glass fibre production (which could require up to 5 tonnes annually), and microelectronics, a sector where palladium is already widely used and could add 12-15 tonnes of new demand globally over time.

Although China remains the largest market, Nornickel is also targeting other regions to diversify demand, including the Middle East, Malaysia, and Brazil. The company has successfully redirected supply chains to Asia, which now accounts for 52% of its sales, despite challenges posed by Western sanctions.

Nornickel expects to produce between 82-85 tonnes (2.624-2.728 million ounces) of palladium in 2024. However, the metal’s price continues to decline, marking its fourth consecutive year of losses. Prices fell 10% in 2024, following a dramatic 39% drop in 2023.