UBS Raises Palladium Price Forecasts Due to Supply Constraints
UBS has increased its near-term price forecasts for palladium, citing a tighter-than-expected supply situation that is supporting prices. The Swiss bank noted that global mine output declined in 2025 and is expected to fall further this year due to declining ore quality in Russia and reduced investment from South African producers. Despite these challenges, demand has remained resilient, supported by the continued use of palladium in hybrid vehicles and a shift back toward it over platinum. Palladium plays a critical role in catalytic converters for petrol-powered cars, making its market closely tied to automotive trends and environmental regulations. UBS raised its forecasts for December 2026 and March 2027 by $200 an ounce each, with the June 2027 forecast up by $100. However, it maintains a bearish long-term outlook as electric vehicles continue to displace traditional petrol engines. The metal's supply is highly concentrated in Russia and South Africa, making it vulnerable to geopolitical or economic disruptions.
Topics: palladium supply and demand UBS forecasts