Platinum vs Palladium: Overview
Platinum and palladium are both platinum group metals (PGMs) — a family of six chemically similar elements mined together. Both metals are essential in catalytic converters, which reduce harmful vehicle emissions, but they serve different vehicle types. Platinum is primarily used in diesel catalytic converters, while palladium dominates gasoline engine applications. Their supply chains are also geographically distinct: approximately 70% of platinum comes from South Africa, while 40% of palladium is mined in Russia, with another 35% from South Africa. This concentration of supply in just two countries — one facing infrastructure challenges and the other under international sanctions — makes both metals vulnerable to supply disruptions. Beyond auto catalysts, both metals have applications in electronics, dentistry, and chemical processing, though platinum has a broader demand base including jewelry and emerging hydrogen technology.
Price History
The platinum-palladium price relationship has undergone a complete inversion over the past two decades. For most of history, palladium was the cheaper metal — often trading at a 50-70% discount to platinum. In the early 2000s, platinum was $800-900/oz while palladium languished around $200-400/oz. The crossover came in 2018, when tightening palladium supply and surging gasoline vehicle demand in China pushed palladium above platinum for the first time on a sustained basis. Palladium then rocketed to an all-time high of approximately $3,440/oz in March 2022, driven by Russian supply concerns following the invasion of Ukraine and persistent auto catalyst deficits. Since that peak, palladium has declined sharply — falling back toward the $900-1,100 range by 2025-2026 — as the EV transition accelerated and automakers substituted platinum in some gasoline applications. Meanwhile, platinum has traded in a relatively narrow $900-1,050 range. The platinum-palladium ratio, which fell below 0.5 at palladium's peak, has now returned closer to parity.
Supply and Demand
Understanding the supply and demand structure of each metal reveals why their prices have moved in such different directions.
- Annual Supply – Palladium: ~210 tonnes | Platinum: ~190 tonnes. Both are rare, but palladium's supply is more concentrated geographically (Russia + South Africa = 75%+)
- Auto Catalyst Demand – Palladium: 80%+ of demand goes to gasoline catalytic converters | Platinum: ~30-35% goes to diesel catalysts. Palladium is far more dependent on a single end use
- Jewelry Demand – Platinum: ~25% of demand (primarily in Japan and China) | Palladium: negligible jewelry demand
- Industrial Applications – Both are used in electronics, dentistry, and chemical processing. Platinum has additional demand from glass manufacturing and petroleum refining
- Hydrogen Economy – Platinum is a critical catalyst in PEM electrolyzers and hydrogen fuel cells. Palladium has minimal exposure to hydrogen technology. This is a potential game-changer for long-term platinum demand
- EV Transition Impact – Battery EVs use zero PGMs in the drivetrain. This threatens palladium more severely than platinum, because palladium is 80%+ dependent on auto catalysts while platinum has more diversified demand
- Recycling – Auto catalyst recycling returns significant volumes of both metals to the market. As older vehicles are scrapped, secondary supply partially offsets declining primary demand
Market Dynamics
Palladium faces structural headwinds. Its dominant demand driver — gasoline catalytic converters — is under pressure from the EV transition. Fewer new internal combustion engines means less palladium demand over time. Russian supply risk remains a factor (sanctions could tighten further), but shifting demand patterns are the primary concern. Investment products for palladium are also limited compared to gold or silver, with smaller ETF markets and less retail accessibility. Platinum has more diversified demand sources. The World Platinum Investment Council (WPIC) has reported supply deficits in recent years, driven by South African mine closures, declining recycling volumes, and steady industrial demand. The hydrogen economy is a developing factor: platinum is used in electrolyzers for green hydrogen production, and government initiatives in this area could create additional demand. Platinum also benefits from substitution — automakers are increasingly replacing palladium with platinum in gasoline catalysts due to the price differential. The two PGMs have very different risk profiles: platinum has more diversified demand sources, while palladium is more concentrated in auto catalysts with higher volatility.