PGM market is moving fast, in the wrong direction. Stock Image.
BMI has trimmed its platinum and palladium price forecasts for 2026, blaming a weaker outlook for car sales and a faster than expected recovery in South African mine output, but the Fitch Solutions unit still expects both metals to end the year in deficit and platinum to pull further ahead of its sister metal over the rest of the decade.
The research house now sees platinum averaging $1,900 an ounce this year, down from $2,000 previously, and palladium $1,400, from $1,500. Platinum was trading at $1,796 an ounce at the time the report was written, down 13% in 2026, and palladium at $1,317, down 20%, after a sell-off BMI pins mainly on a 40 basis point jump in the 10-year US Treasury yield over the past month. Both have since recovered some ground, with platinum changing hands near $1,850 on Wednesday and palladium at $1,360.
The cuts leave BMI below the Street on this year. Bloomberg consensus has platinum averaging $2,066 in 2026 and palladium $1,471. From 2028 the positions flip: BMI has platinum climbing to $2,100 in 2028, $2,250 in 2029 and $2,300 in 2030, against consensus of $2,000, $1,925 and $1,725, while its palladium path slides to $1,200, $1,100 and $1,000 over the same years, below the $1,321 to $1,342 the consensus expects.
Fewer cars, thinner catalysts
BMI’s autos team now expects global vehicle sales to fall 1% this year because of the US-Iran conflict, having started 2026 forecasting 2.6% growth. Autocatalysts remain the largest end use for both metals, and the report warns the hit will not stop at volumes: with Toyota reporting a $4 billion cost blow from the Middle East conflict, carmakers are expected to push harder on thrifting, trimming platinum, palladium and rhodium loadings wherever regulation allows.
The World Platinum Investment Council’s second-quarter report, published Wednesday, reads the car market the same way, with light-vehicle production now seen falling 1% and platinum autocatalyst demand down 4% to 2.9 million ounces, the weakness concentrated in China and Europe and partly offset by hybrids and larger vehicles in North America and India. Jewellery is the bigger casualty in WPIC’s numbers, down 32% year on year in the quarter and forecast to fall 15% for the year as Chinese buyers switch back to gold, while industrial demand is upgraded by 147,000 ounces to 2.39 million on AI-related glass and electrical applications.
South Africa: more ounces, fewer shafts
On the supply side, BMI lifted its forecast for South African platinum mine output to 4.3 million ounces this year, a 2% increase, almost entirely because of Valterra Platinum. The former Anglo American Platinum reported a 12% rise in first-half platinum mine production to 462,000 ounces, with refined output up 40% to 557,000 ounces, as Amandelbult recovered from the 2025 flooding, and a 17-fold jump in half-year profit on an 85% surge in realised prices. Implats, whose annual profit rose more than 31-fold, lifted refined production 5% to 3.56 million ounces of 6E metal by working down inventory in its processing pipeline.
The extra ounces are coming from a shrinking base. Sibanye-Stillwater said on Tuesday it will restructure the Kwezi shaft at its South African PGM operations, putting 1,114 jobs at risk, after a project to reach shallower reserves and extend the shaft’s life ran into objections and permitting delays. The shaft lost R299 million over 2024 and 2025 and is forecast to lose money again in the second half of this year despite stronger prices. Sibanye’s South African 4E output fell 1.8% in the first half.
BMI expects that pattern to hold: South African mines are among the oldest, deepest and most capital-intensive in the world, costs keep climbing, and producers have chosen to return cash rather than build new capacity, so mined volumes will trend lower on falling grades while refined output struggles with rising power costs in Limpopo and Gauteng. The industry is also starting to consolidate. Northam Platinum, the country’s fourth-largest producer, invited bids in late August after an unsolicited approach that Bloomberg attributed to Valterra, and chief executive Paul Dunne said any deal could lead to further consolidation.
The one new mine of note is in Zimbabwe, where Tharisa’s Karo project, due to produce 226,000 ounces of PGMs a year in its first phase from next year, signed a five-year concentrate offtake with Valterra for processing at the Unki smelter. BMI notes that Ivanhoe’s Platreef, the only major PGM mine to come online in the past decade, began exploration more than 30 years ago and only produced first concentrate last November.
Palladium: Russia and Montana
In Russia, the largest palladium producer, BMI still expects mine output to contract 7% to 2.9 million ounces in 2026 after Norilsk Nickel reported a 14% first-half decline to 1.2 million ounces, even as higher prices doubled the company’s half-year profit to $2 billion. The firm does not expect a Western import ban, arguing Russia is too dominant for one to work without disrupting automotive supply chains, and treats a unilateral Russian export restriction as the main upside risk rather than its central case.
The other big palladium supplier outside Russia has its own problem. About 750 United Steelworkers members walked out at Sibanye-Stillwater’s Stillwater East mine and Columbus smelter in Montana on September 3 after four months of contract talks failed. The US operations, the largest primary palladium producer outside Russia and South Africa, produced 137,930 ounces of palladium and platinum in the first half.
Even after the supply upgrades, BMI has platinum 204,000 ounces short this year and palladium 102,000 ounces short, and the report reads the lease-rate market the same way: one-month platinum rates have eased to 2.2% from 5% at its June update, but that is still well above the 0.8% palladium commands, evidence that platinum liquidity remains the more constrained of the two. Speculators are net long platinum and net short palladium.
Warehouses tell the story
Platinum held in Comex-approved warehouses is down 39% this year to 393,000 ounces as of August 28, after the Supreme Court’s February ruling against the Trump administration’s reciprocal tariffs removed the incentive to hold deliverable metal inside the US. Those outflows have loosened the market elsewhere and helped ease lease rates, but they have also shrunk the buffer available to absorb future deficits. US palladium stocks, by contrast, are up 18% in 2026, which BMI takes as confirmation of a looser physical market.
Investment demand is stabilising. Holdings in Aberdeen’s physically backed platinum ETF have climbed from a 2026 low of about 1.13 million ounces to 1.22 million by the end of August, roughly back to where they stood before the liquidation that followed the outbreak of the Middle East conflict. Palladium ETF holdings have recovered from their low but remain well below the early-2026 peak.
ETF outflows of 234,000 ounces in the second quarter and a 71% collapse in bar and coin buying left net disinvestment of 121,000 ounces and a 244,000-ounce surplus, the second in a row after the first quarter ended six quarters of deficit. The council now forecasts a 265,000-ounce surplus for 2026 as a whole, the first since 2022, but it also revised the 2025 deficit deeper, to 1.44 million ounces, so above-ground stocks reach only 2.01 million ounces by December, about 3.4 months of demand.
“The modest forecast surplus follows three consecutive years of significant deficit and does little to reduce the platinum market’s reliance on exceptionally lean and increasingly illiquid above ground stocks,” WPIC chief executive Trevor Raymond said, adding that investment demand could return “especially should interest rate increases fail to materialise or be lower than expected.”
Palladium surplus from 2027
Longer term the gap between the two metals only widens on BMI’s numbers. It expects palladium to swing into a 182,000-ounce surplus in 2027, growing to almost 1 million ounces a year by 2030, as vehicle fleets built when palladium dominated catalyst design reach the scrapyard and secondary supply climbs. Its palladium price forecast bottoms at $900 an ounce from 2033.
Platinum’s deficit deepens from 419,000 ounces in 2027 to more than 700,000 ounces by 2030 and stays above 550,000 ounces through 2035, eroding above-ground stocks and carrying the price to $2,450 in 2031 and 2032. BMI expects AI data centre and defence demand to partially offset the decline of the combustion engine, with platinum one of twelve metals on NATO’s list of defence-critical raw materials, but sees hydrogen fuel cells as impractical at scale until the 2040s for want of a refuelling network.