Johnson Matthey analysts expect the palladium market to move into balance in 2025, following more than a decade of deficits from 2012 to 2024. This shift is driven by a 6% drop in palladium demand, mainly due to reduced production of gasoline vehicles and weaker investment interest. The outlook for platinum group metals (PGMs)—platinum, palladium, and rhodium—remains highly uncertain for the year, as new U.S. tariffs and potential retaliatory measures from other countries could further reduce consumption in automotive and industrial sectors, pushing actual demand below current forecasts.
The company forecasts a 5% decline in PGM use in vehicles this year, with additional downside risk if tariffs lead to lower car production. Reduced vehicle sales could also decrease the supply of recycled materials from scrapped cars, impacting secondary supply. For palladium, robust growth in automotive recycling in China is expected to increase secondary supply by 4%, offsetting a 4% decline in mine output from South Africa and the United States.
For platinum, Johnson Matthey projects a third consecutive year of significant market deficit, with primary supply falling by 3% due to operational constraints in South Africa and reduced recycling in most regions except China. Automotive platinum use is forecast to decline by 5% from a sixteen-year high in 2024, as battery electric vehicles continue to gain market share in both passenger and truck segments.
Rhodium is also expected to remain in deficit, with both supply and demand dropping by 1% as a result of lower mine production and reduced automotive consumption. The demand outlook for all three PGMs is clouded by uncertainty over trade policies and their potential impact on global vehicle manufacturing and industrial activity.
