WPIC – Platinum Perspectives, Feb 2024

The palladium price has fallen, bringing it close to parity with platinum for the first time since 2018. This drop was anticipated due to forecasts of a palladium surplus starting in 2025. Investors are now net short on palladium, making it susceptible to short covering rallies. On the other hand, platinum's fundamentals are more favorable, with a market deficit expected to continue until at least 2028. The shift in prices began in 2018 when palladium surpassed platinum and remained at a premium for almost three years. This led to significant substitution of platinum for palladium in the automotive industry. Palladium prices peaked in 2022 following geopolitical events, while platinum's outlook has become more positive. Palladium faces challenges such as automotive substitution and an overreliance on ICE autocatalyst demand, while platinum benefits from diverse end markets. WPIC predicts platinum deficits until at least 2028, while palladium is expected to transition to a surplus from 2025. Investors have built short positions on palladium, while platinum's positioning has been less consistent.