Platinum and palladium surge violently, spot consumption remains sluggish [SMM Daily Review]

Craig Miller, CEO of Valterra Platinum, stated that artificial intelligencehas become an important tool to foster new applications and markets for platinum‑group metals. It can notably accelerate the R&D of various metal formulations and new‑type alloys, greatly shortening the development cycle of conventional materials. Although the current scale of relevant applications remains modest, the company sees substantial long‑term growth potential.

[SMM Flash] Platinum’s constrained supply and broad industrial applications could strengthen its position as a potential “value metal” during the next commodity cycle. The World Platinum Investment Council (WPIC) expects the platinum market to remain in deficit for a fourth consecutive year in 2026, with demand forecast to exceed supply by about 297,000 oz. Above-ground inventories are projected at roughly 1.75 million oz, equivalent to less than three months of global demand. Supply growth is also structurally limited, with new production requiring substantial capital and potentially 8–12 years to reach full output, leaving the market vulnerable to stronger demand and price volatility. Beyond automotive applications, platinum demand is supported by industrial uses including hydrogen technologies, fuel cells and electrolysers, while investment demand is also strengthening. Physical bar and coin demand is forecast to reach about 718,000 oz in 2026, a six-year high, according to WPIC. However, platinum remains exposed to risks including weaker global industrial activity, declining automotive demand from the transition to battery-electric vehicles, increased recycling at higher prices and potential investor profit-taking. The combination of supply constraints, industrial demand and renewed investment interest could support a higher valuation for platinum, although its price outlook remains sensitive to economic and market conditions.

[SMM Flash] The UK’s review of its zero-emission vehicle mandate could provide some support for palladium demand if manufacturers receive greater flexibility over the pace of battery electric vehicle (BEV) adoption, according to Heraeus. BEVs accounted for 25% of UK new car registrations in the first half of 2026, below the 33% target under the current mandate, while hybrids and plug-in hybrids accounted for 37.7% and 13% respectively. Similar trends are evident in Europe, where hybrids held a 37.3% share of new registrations during the same period. Greater regulatory flexibility could extend demand for palladium-containing autocatalysts as consumers increasingly use hybrid vehicles during the transition towards BEVs. However, Heraeus notes that this would likely slow rather than reverse the longer-term decline in automotive palladium demand as vehicle electrification progresses. Palladium prices recently retreated after rising from about $1,150/oz in late June to nearly $1,400/oz in early August, with the metal currently testing resistance around $1,335/oz. Meanwhile, platinum has risen from approximately $1,550/oz in early July to above $1,900/oz, while rhodium, ruthenium and iridium were reported at around $9,200/oz, $1,745/oz and $8,300/oz respectively.