UBS lowered its palladium price forecast to $1,400 per ounce from $1,600 across all tenors, citing an expected surplus in 2026 after 14 years of deficits.
Johnson Matthey reports a 2025 undersupply of 416,000 ounces (4.1% of demand) and revises the 2024 deficit to 218,000 ounces, down from 501,000 ounces.
Strong investment demand of 382,000 ounces in 2025 supported shortages; however, ETF holdings have declined in 2026 and investment demand is projected to turn negative.
Autocatalyst demand fell 1.2% in 2025 and is expected to decline further as internal combustion engine vehicle production drops.
Scrap supply is likely to increase in 2026, aided by a renewed vehicle trade‑in incentive scheme in China.
UBS cites ongoing economic growth concerns and deteriorating fundamentals as reasons for the forecast reduction.
