Platinum is replacing palladium in key industries like car manufacturing because its price has dropped below palladium’s, making it cheaper to use, while platinum benefits from stronger supply shortages and new demand in clean energy.
Both metals help clean exhaust from car engines in catalytic converters. For years, car makers favored palladium because it worked well and was sometimes cheaper. But prices changed in 2025. Platinum surged nearly 80 percent to over $1,600 an ounce, while palladium rose about 70 percent, putting platinum at a premium for the first time in years.https://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-ithttps://www.interactivebrokers.com/campus/traders-insight/securities/commodities/why-a-structural-deficit-and-hydrogen-economy-could-boost-platinum/ This shift lets car makers swap back to platinum, just like they did when palladium hit $3,500 an ounce years ago and platinum was under $1,000.https://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-it
Platinum faces a big supply gap. Experts at the World Platinum Investment Council predict an 850,000 ounce deficit in 2025, with shortages lasting years even as recycling picks up.https://www.interactivebrokers.com/campus/traders-insight/securities/commodities/why-a-structural-deficit-and-hydrogen-economy-could-boost-platinum/ Palladium lacks this tight supply story. Palladium relies on cars for over 80 percent of its use, mostly in hybrids and gas engines, which electric vehicles threaten.https://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-it Platinum spreads its demand wider, with only 40 to 46 percent in car catalysts and 26 percent in jewelry.https://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-it
New markets boost platinum too. China calls platinum a strategic mineral for its hydrogen plans, like fuel cells and electrolyzers to make green hydrogen.https://www.cruxinvestor.com/posts/chinas-strategic-critical-mineral-classification-of-platinum-its-investment-implications-for-global-pgm-supply-pricing-and-emerging-developers Demand there could hit 875,000 to 900,000 ounces by 2030 for fuel cell trucks, buses, and power backups.https://www.interactivebrokers.com/campus/traders-insight/securities/commodities/why-a-structural-deficit-and-hydrogen-economy-could-boost-platinum/ China launched platinum futures trading in late 2025 on the Guangzhou exchange, pulling in more physical metal and tightening global stocks.https://www.cruxinvestor.com/posts/chinas-strategic-critical-mineral-classification-of-platinum-its-investment-implications-for-global-pgm-supply-pricing-and-emerging-developershttps://www.ipmi.org/news/platinums-80-surge-3-hidden-forces-driving-it
Trade issues add pressure. U.S. lists platinum and palladium as critical minerals, sparking fears of tariffs up to 50 percent, though exempted earlier.https://www.investing.com/news/commodities-news/why-have-silver-platinum-and-palladium-rallied-so-much-in-2025-4381121 Russian palladium faces anti-dumping probes, pushing traders to move metal to U.S. warehouses and drain London stocks.https://www.investing.com/news/commodities-news/why-have-silver-platinum-and-palladium-rallied-so-much-in-2025-4381121 Investors piled in after Fed rate cuts, seeing platinum as a high-reward bet over gold.https://www.investing.com/news/commodities-news/why-have-silver-platinum-and-palladium-rallied-so-much-in-2025-4381121
These forces mak