UBS lowered its palladium price forecast to $1,400 per ounce from $1,600, citing expectations that the metal will move into surplus in 2026 after 14 consecutive years of deficits.
Johnson Matthey reported that the palladium market was undersupplied by 416,000 ounces in 2025, equivalent to around 4.1% of demand.
The deficit in 2024 was revised down from 501,000 ounces to 218,000 ounces. Strong investment demand of 382,000 ounces in 2025 helped support another year of shortages.
Total palladium demand was slightly higher in 2025 versus 2024, with autocatalyst demand declining by only 1.2%. Lower mine supply also helped keep palladium undersupplied.
UBS expects palladium to move into surplus in 2026 as strong investment demand appears unlikely to continue. ETF holdings have declined and scrap supply is likely to rise further, while autocatalyst demand is expected to fall.
