UBS raises palladium price forecasts amid tightening supply
UBS has increased its palladium price forecasts for late 2026 and early 2027, citing a tightening physical market. The bank anticipates a modest decline in global demand in 2025, with expectations of stability in 2026, supported by slower-than-expected reductions in internal combustion engine use and ongoing hybrid vehicle adoption in gasoline-heavy markets. On the supply side, global palladium mine production declined in 2025 and is expected to contract again in 2026, with Russian output affected by declining ore grades and South African producers prioritizing capital discipline over volume growth. Improved recycling helps but does not fully offset the weakness in mined supply, creating a tighter market backdrop that is likely to limit price downside this year.
Key points
- UBS raises palladium price forecasts for late 2026 and early 2027, citing tightening supply.
- Global palladium demand declined only modestly in 2025 and is expected to remain broadly stable in 2026.
- Long-term demand outlook for palladium remains negative due to transport electrification and the expected decline in internal combustion-engine vehicle production.
- Recycling improvements offset only part of the weakness in mined supply, leading to a tighter market backdrop.
Sources
AI-generated from public news sources. Not financial advice.
