Palladium Just Went into Surplus. That Is the Combustion Engine Shrinking.

Written 11 September 2026, on Johnson Matthey’s 2026 PGM Market Report, Metals Focus forecasts reported by Kitco, and half-year reviews published since.

The two platinum-group metals have separated. Platinum is forecast to average around $2,190 an ounce in 2026, up roughly 71 per cent year on year, having touched an all-time high near $2,923 in late January. Palladium is forecast around $1,570, up about 37 per cent.

The prices moved together. The fundamentals did not. Platinum is running a fourth consecutive deficit, put at around 312,000 ounces, while palladium has swung from a 416,000-ounce deficit in 2025 to a projected surplus near 214,000 ounces.

Palladium’s demand is overwhelmingly autocatalysts in petrol vehicles. As global petrol car output falls, that demand falls with it — and this is the first year the effect has been large enough to turn the balance.

Recycling did the rest. Johnson Matthey expects double-digit growth in autocatalyst recycling volumes in 2026 after several subdued years, which adds secondary supply exactly when primary demand is shrinking.

Platinum is more diversified — diesel autocatalysts, jewellery, industrial and chemical process uses, investment, and a hydrogen role in electrolysers and fuel cells that is real but still small. Above-ground stocks have been drawn down to around 9.0 million ounces, and mine supply from South Africa has not recovered.

The hydrogen story is the one most often oversold. It is a genuine source of future demand and it is not what is causing today’s deficit; the deficit is mine supply and stock drawdown. Anyone citing platinum as a hydrogen play should be explicit that they are forecasting, not describing.

Directly, very little. Neither metal is in a lithium-ion battery, a BESS container or a solar module. Wingzman’s exposure is nil.

Indirectly, palladium is worth watching as a leading indicator. It prices the thing electrification is replacing, and it is doing so in a market that cannot hide behind a narrative — there is no data-centre demand story for palladium, no strategic-stockpile story, no investment bid of consequence. It is petrol engines, and the number is going the way the number is going.

• •Platinum: supply-constrained, diversified demand, a hydrogen option that is not yet the driver
• •Palladium: demand-driven surplus as petrol vehicle output falls and recycling recovers
• •Neither is an input to lithium batteries, storage or solar
• •Both are here as read-across on the combustion fleet, not as a cost line