Key Moments
- UBS cut its palladium price target to $1,400 per ounce from $1,600 across all tenors. It cited an expected surplus in 2026.
- Johnson Matthey reported a palladium deficit of 416,000 ounces in 2025. That equals about 4.1% of demand. It also revised the 2024 deficit down to 218,000 ounces.
- UBS expects investment demand to turn negative in 2026. At the same time, ETF holdings may fall and scrap supply may rise. These shifts point to a market surplus.
UBS Cuts Palladium Price Forecast
Investing.com – UBS lowered its palladium price forecast across all tenors. It reduced the target to $1,400 per ounce from $1,600. The bank expects the market to move into surplus in 2026. This follows 14 straight years of deficits.
Deficits Persist in 2024 and 2025
Johnson Matthey released its latest platinum group metals report. It showed that palladium remained undersupplied in 2025 by 416,000 ounces. That equals about 4.1% of total demand.
The firm also revised the 2024 deficit lower. It cut the estimate from 501,000 ounces to 218,000 ounces. Meanwhile, strong investment demand of 382,000 ounces helped support shortages in 2025. Investors continued to seek real assets through much of the year.
Total demand in 2025 rose slightly compared with 2024. Autocatalyst demand fell only 1.2% year over year. In addition, lower mine production kept supply tight. As a result, the market stayed undersupplied.
| Year | Market Balance | Key Drivers |
|---|---|---|
| 2024 | 218,000-ounce deficit (revised from 501,000) | Lower mine supply and strong investment demand |
| 2025 | 416,000-ounce deficit (about 4.1% of demand) | Strong investment inflows and small drop in autocatalyst demand |
| 2026 (outlook) | Expected surplus | Weaker investment demand, higher scrap supply, lower autocatalyst demand |
Shift Toward Surplus in 2026
UBS expects palladium to move into surplus in 2026. It sees weaker investment demand as a key driver. ETF holdings have already fallen in 2026. Therefore, UBS expects investment demand to stay negative.
Meanwhile, scrap supply is likely to rise. Johnson Matthey notes that China’s vehicle trade-in program could boost scrap volumes. This may add further supply pressure in the market.
Demand Outlook and Macroeconomic Concerns
Autocatalyst demand is expected to decline further. This reflects slower production of internal combustion engine vehicles. In addition, UBS pointed to weaker global growth expectations.
Overall, UBS lowered its price outlook due to weaker fundamentals. Therefore, it expects continued pressure on palladium prices in the medium term.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
