Palladium All-Time High

Palladium's all-time high of approximately $3,440 per ounce was reached in March 2022, triggered by the Russia-Ukraine conflict and fears of severe supply disruptions. Russia accounts for roughly 40% of global palladium production through Norilsk Nickel, and the prospect of sanctions on Russian exports sent prices surging to unprecedented levels. The rally built on years of structural supply deficits caused by surging catalytic converter demand for gasoline vehicles. Since the 2022 peak, palladium prices have fallen sharply as the electric vehicle transition accelerates, reducing future demand for catalytic converters.

• Russian Supply Risk (2022) – Russia's invasion of Ukraine in February 2022 sent palladium to its record high as markets priced in the potential loss of ~40% of global supply. Though Russian exports were not fully sanctioned, the threat alone was enough to create panic buying and an extreme price spike.
• Catalytic Converter Demand – Gasoline-engine vehicles require palladium-loaded catalytic converters to meet emissions standards. Roughly 80% of palladium demand comes from the auto sector, making the metal uniquely sensitive to vehicle production trends and emissions regulations.
• Chip Shortage Impact (2021-2022) – The global semiconductor shortage limited new car production, which paradoxically kept older, high-emission vehicles on the road longer while also creating pent-up demand for new catalytic converters. This tightened the palladium market further heading into the 2022 crisis.
• EV Transition Headwind – Battery electric vehicles do not use catalytic converters, eliminating palladium demand entirely. As EV market share grows -- surpassing 20% of global new car sales -- the long-term demand outlook for palladium has deteriorated significantly, weighing on prices since the 2022 peak.
• Platinum Substitution – Automakers have accelerated research into replacing palladium with cheaper platinum in gasoline catalytic converters. Several manufacturers have begun implementing partial substitution, which could structurally reduce palladium demand even in remaining ICE vehicle production.