Palladium

18 September 2026, 10:52 UTC Chief Investment Office GWM Investment Research

Bearish sentiment, tighter fundamentals CIO View: Palladium Giovanni Staunovo, Strategist, UBS Switzerland AG

Market data and forecasts (USD/oz) • Palladium prices are holding up better than we expected, likely Forecasts Spot reflecting a tighter market backdrop. 18 Sep 26 1,327 • Supply disappointments—driven by deteriorating Russian ore grades Dec 26 1,300 and capital discipline in South Africa—together with more resilient Mar 27 1,300 autocatalyst demand are keeping the palladium market balanced to slightly undersupplied, in contrast to our earlier expectation of a Jun 27 1,200 surplus. Sep 27 1,100 Source: Bloomberg Finance, UBS. Note: Forecasts • We therefore raise our near-term forecasts while retaining a negative refer to end of period longer-term outlook for the white metal.

Palladium price Values are in USD/oz We maintain a cautious view on palladium. That said, prices have been stronger than we expected, as physical fundamentals point to a tighter market. The long-term demand outlook for the white metal remains negative, owing to transport electrification and the expected decline in internal combustion-engine vehicle production. While this structural trend remains intact, the transition is progressing more slowly than anticipated. Global palladium demand declined only modestly in 2025 and is forecast to remain broadly stable in 2026. Hybrid adoption—particularly in gasoline-heavy markets such as the US, Brazil, and parts of Asia— continues to support autocatalyst consumption. Moreover, palladium’s widening discount to platinum is increasingly improving the economics Source: Bloomberg, UBS of substituting palladium back into autocatalysts for gasoline-powered vehicles.

On the supply side, the market remains fundamentally constrained. Global mine production declined in 2025 and is expected to contract again in 2026. Russian output is being affected by declining ore grades, while South African producers continue to prioritize capital discipline over volume growth. Recycling is improving, but this recovery offsets only part of the weakness in mined supply.

This tighter backdrop is likely to limit price downside this year. We therefore raise our December 2026 and March 2027 forecasts by USD 200/oz and our June 2027 forecast by USD 100/oz.

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures that begin on page 2.

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