For the Quarter Ending December 2024
North America
In Q4 2024, the palladium market in North America experienced notable fluctuations influenced by supply constraints and demand shifts in the automotive and manufacturing sectors. Prices increased by 7% in October due to tight supply and geopolitical tensions surrounding potential sanctions on Russian palladium exports. However, by November, the market stabilized amidst supply fluctuations, despite new export orders decreasing at an accelerated rate due to international demand challenges. Finally, in December, palladium prices fell by 4% as trading activity slowed during the holiday season, and a weaker dollar impacted market sentiment.
Key factors affecting the market included elevated palladium inventories stemming from earlier restocking efforts and ongoing geopolitical uncertainties surrounding Russian supplier Norilsk Nickel, which controls a significant portion of global palladium supply. Despite a marginal uptick in automotive demand—reflected by a 2.8% increase in vehicle sales—the overall palladium demand faced pressures from the rising popularity of electric vehicles (EVs).
The quarter-ending price for Palladium Metal DEL Alabama stood at USD 975/oz. Overall, Q4 pricing trends showed initial increases followed by stabilization and subsequent declines, illustrating the interplay of supply chain dynamics, consumer trends, and geopolitical influences that market participants must navigate.
Europe
In Q4 2024, the palladium market in Europe exhibited significant volatility, driven by a range of economic and geopolitical factors. Prices rose by 7% in October due to tight supply amid potential sanctions on Russian palladium exports, which created uncertainty in market access to this vital resource, particularly from MMC Norilsk Nickel, the largest global producer. However, by November, prices stabilized as the automotive sector maintained its reliance on palladium, though the inventory levels remained slightly elevated due to earlier restocking efforts. The environment turned more challenging in December, with palladium prices falling by 4%, primarily influenced by seasonal trading slowdowns during the holidays and a weakening dollar. Demand from the gasoline-powered vehicle segment remained tepid, as indicated by a 7.1% decline in new passenger car registrations in December, exacerbating concerns over future palladium demand amid the industry's transition to electric vehicles. The quarter-ending price for Palladium Metal FD Ruhr was USD 1,142/oz. Q4 pricing trends reflected a mix of initial increases, stabilization, and eventual declines, illustrating the complexities of supply disruptions, geopolitical uncertainties, and shifting consumer preferences that market participants must navigate moving forward.
APAC
In Q4 2024, the palladium market in the APAC region experienced notable fluctuations, primarily driven by geopolitical factors and shifting demand dynamics, particularly in the automotive sector. Palladium prices surged by 7% in October, fuelled by tight supply amid potential U.S. sanctions against Russian exports, notably from Norilsk Nickel, the world’s largest palladium producer. However, the momentum shifted, leading to price stabilization in November due to consistent demand from the automotive industry, despite concerns over electric vehicle (EV) adoption impacting traditional gasoline-powered vehicle sales. By December, palladium prices fell by 4%, influenced by decreased trading activity during the holiday season and a weaker dollar. The Chinese market, fundamental to palladium demand, showed robust performance with nearly 1.27 million new-energy vehicles sold in November, reflecting strong year-on-year growth. Despite this, overall demand for palladium waned as EV sales surged, indicating a critical transition within the automotive sector. The quarter-ending price for Palladium Metal Ex-Shanghai was USD 1,142/oz. Throughout Q4, prices displayed a trend of initial increases followed by stabilization and subsequent declines, illustrating the complexities faced by market participants amid geopolitical uncertainties and evolving demand landscapes.
For the Quarter Ending September 2024
North America
The North American palladium market experienced significant volatility in Q3 2024. August saw a sharp 7.8% decrease in spot market prices, while September witnessed a notable surge following the Federal Reserve's unexpected 50 basis point rate cut, which typically supports commodity prices. Supply faced considerable challenges, with North American output projected to be 6% lower and contributing to a 4% decline in global primary production.
The market was further impacted by delays in Russian smelter upgrades and subdued recycling activities despite a projected 3% increase in secondary supply. Demand showed weakness throughout the quarter, with overall global demand forecasted to decrease by 1% to 9.33 million ounces. The automotive sector, a key demand driver, experienced significant decline with new vehicle sales dropping 12.3% in September to 1,172,101 units.
This decline was attributed to fewer selling days and reduced consumer spending amid inflation and rising interest rates. The quarter recorded a slight decrease of 4% from the previous quarter. The quarter ended with prices at USD 959/OZ of Palladium Metal DEL Alabama (USD/oz) (USA), reflecting the overall downward trajectory in pricing for the region.
Asia-Pacific
The APAC region experienced mixed trends in the palladium market during Q3 2024. In China, despite sluggish automotive demand, prices rose in August, supported by global supply constraints. The Chinese market saw positive momentum in September, with gasoline car sales increasing by over 100,000 units from August, bolstered by government vehicle trade-in initiatives, despite a weak Manufacturing PMI remaining in contraction.
Malaysia faced more challenging conditions, with palladium prices falling 7.8% in August due to reduced primary production and automotive sector weakness. Proton, the national carmaker, reported mixed sales results, while the manufacturing sector showed continued weakness with flat new order growth and declining production levels. Both markets were influenced by global supply dynamics, including a 4% decrease in primary production due to delays in Russian smelters and reduced North American output.
Overall demand is projected to decline by 1% to 9.33 million ounces, primarily due to the automotive industry's shift toward electric vehicles and rising interest rates. The quarter recorded a slight decrease of 4% from the previous quarter. The quarter ended with prices at USD 1084/OZ of Palladium Metal Ex-Shanghai (USD/oz) (China), reflecting the overall downward trajectory in pricing for the region.
Europe
In Q3 2024, palladium prices in Europe faced challenges, highlighted by a 7.8% drop in the German spot market during August, largely due to a 4% decrease in primary production from Russia and North America. Despite a projected 3% increase in secondary supply from recycling, demand is forecasted to decline by 1% to 9.33 million ounces, driven by reduced automotive needs as the industry shifts towards electric vehicles and rising interest rates. The US Manufacturing Index also indicated a slowdown, reflecting a broader decline in manufacturing health.
By September, palladium prices surged 8.11%, aided by a Federal Reserve rate cut that weakened the dollar and boosted commodities. However, Germany’s automotive sector reported a 7.0% year-over-year decline in new passenger car registrations, with gasoline vehicle sales dropping significantly.
The region is navigating a complex landscape, with supply shortages due to production challenges in key areas like Russia and South Africa impacting market dynamics. The quarter recorded a slight decrease of 4% from the previous quarter, ending with prices at USD 1123/OZ of Palladium Metal FD Ruhr (USD/oz), reflecting the overall downward trajectory in pricing for the region.
