Nornickel — No. 1 in palladium production (%)Refined metal output including production from third-party feedstock and production from own feedstock by third parties under tolling agreements.
Nornickel — No. 4 in platinum production (%)Refined metal output including production from third-party feedstock and production from own feedstock by third parties under tolling agreements.
Nornickel — No. 5 in rhodium production (%)Refined metal output including production from third-party feedstock and production from own feedstock by third parties under tolling agreements.
Sources: producer reports, Company analysis as of 9 March 2023

Key trends in the PGM market

PGM consumption by region (%)
Average annual PGM prices (USD/oz)
Source: LBMA, Johnson Matthey

Palladium price started the year at around USD 1,900/oz; however, in the second half of January, it increased sharply to USD 2,432/oz, as the fear of geopolitical crisis was building up. The price shot further up to USD 2,650/oz on 24 February and skyrocketed to an all-time high of USD 3,177/oz on 7 March.

From the end of April, once the market squeeze was over, palladium was trading in the range of USD 1,800/oz to USD 2,300/oz up until late July, when it found strong support at USD 2,000/oz on the back of 2022’s first year-on-year growth in monthly global auto sales, mainly caused by the easing of China’s COVID-related restrictions. Since then, the price was repeatedly hitting both the upper and lower boundaries of this range without breaking through them.

A notable attempt to break the USD 2,300/oz resistance level occurred on 4 October. Although palladium closed above the USD 2,300/oz level, the relatively light trade volume did not signal the significance of the resistance level breakout. Further into the autumn, the price fall continued on the back of the new negative demand expectations related to the potential short- and mid-term production cuts by the European automotive sector.

In the middle of December, the price fell below USD 1,800/oz on the back of weak car market performance in China, the USA and Western Europe, the possible sale of consumer stocks before the end of the financial period and speculative actions (closing long and/or opening short positions) after the Fed’s announcement of higher than expected peak interest rate target. The price bounced back to USD 1,800/oz level by the end of the year. 

The platinum price experienced the same shocks as palladium, of which the geopolitical crisis was the most notable. It reached its local high on 8 March at USD 1,150/oz. With supply concerns subsiding, the platinum price corrected down to its year-lows of USD 838/oz at the beginning of September. Operational disruptions at South African mining assets, mostly but not exclusively caused by unstable electricity supply, have set the price of platinum on an upward trend since the beginning of September. The ETF outflow in 2022 was 0.6 Moz as elevated interest rates reduced investors’ appetite for commodities.

Rhodium prices also followed the palladium pricing trends as the two metals have similar consumption breakdowns by industry. After peaking at USD 22,000/oz on 8 March, prices dipped to USD 13,500–14,000/oz in the first half of the summer, and then, despite local support from the Chinese automotive industry recovery, rhodium prices followed a downward trend, hitting a year-low of USD 12,300/oz in late December.

Palladium and platinum prices in 2022, LPPM

  1. The geopolitical crisis starts
  2. The LPPM suspends Russian refineries from the Good Delivery List
  3. Automobile manufacturing starts to recover in China
  4. The world’s leading platinum producer announces lower production in 2022
  5. OPEC+ commits to cut production, driving up inflation expectations. A positive trend starts in precious metals markets on expectations of a softer-than-anticipated Fed policy in the medium term
  6. Daily blackouts start in South Africa
  7. The Fed slows interest rate increases with a 50 bps hike but signals a potentially higher-than-expected peak interest rate target
  8. Speculative sales of palladium as the fiscal year draws to a close

Market balance

In 2022, the palladium market remained in a moderate deficit estimated at 16 t (net of investment demand), while the surplus in the platinum market shifted to a balanced market, and deficit in rhodium remained at 4 t. Demand for platinum group metals was primarily driven by slower-than-expected recovery rates in auto production after the slump caused by COVID-19 as well as by the substitution effect between platinum, palladium and to a lesser extent rhodium in automotive catalysts. In 2022, PGM supply fell due to lower recycling, the flooding of the Stillwater Mine in the USA, and the lack of smelting capacities and widespread power outages in South Africa.


In 2022, industrial consumption of palladium and platinum fell by 14 t (down 4%) y-o-y and 3 t (down 1%) y-o-y to 295 t and 221 t, respectively. In 2022, industrial consumption of rhodium stayed flat at 33 t.

Automotive industry. Exhaust treatment systems account for the bulk of total PGM consumption. In this sector, palladium, platinum and rhodium are used in catalytic converters, which are mandatory for road transport and legally regulated in most countries. These solutions drastically reduce emissions of hazardous substances.

Due to their unique catalytic properties ensuring effective chemical reactions throughout the entire vehicle life cycle, there are almost no alternatives to PGMs in this sector.

Due to their catalytic properties, palladium and rhodium are the key choice for exhaust treatment systems in petrol vehicles, while platinum is used mostly in diesel vehicles. In recent years, manufacturers of catalytic systems have been developing catalysts based on the three platinum group metals, which could be used in engines of different types, but such formulations are not widespread yet. Meanwhile, there has been a partial substitution of platinum for palladium in petrol vehicle catalysts in recent years due to the price spread between the metals.

In 2022, palladium consumption in the automotive industry decreased by 9 t as the overall automotive industry recovery was taking place in parallel with the increase in the proportion of electric vehicles in the market, which, combined with limited price-driven substitution of platinum for palladium in petrol vehicles, reduced the overall consumption of the metal by the industry.

At the same time, palladium consumption in the automotive industry is supported by the declining proportion of diesel vehicles in the fleet mix as they are replaced with petrol cars and hybrids, which make greater use of palladium-based catalytic converters for exhaust fumes. The market share of diesel vehicles in Europe (27 EU countries + the UK + European Free Trade Association countries) dropped from 20% to 16% over the year. Despite the declining share of diesel vehicles, global demand for platinum from the automotive industry has grown by 10 t in 2022 driven by the partial substitution of platinum for palladium in petrol vehicles, as discussed above.

Rhodium consumption in this industry stayed flat year-on-year amid a moderate recovery in auto production offset by a partial palladium substitution for rhodium.

Electronics. Palladium has found its way into the electronics industry primarily as a material for capacitors and motherboards, while platinum is used in hard drives. In 2022, palladium and platinum consumption in the electronics industry fell by 3 t and 1 t to 17 t and 5 t, respectively, subdued by a marked decline in personal computer and smartphone shipments due to strong inventory accumulation and stocking up during the pandemic in 2019–2020.

Chemical industry.In 2022, the use of PGMs in chemical process catalysts stayed flat year-on-year.

Healthcare. Demand for palladium in healthcare dipped by 1.5 t in 2022 due to a drop in demand for the metal in dental prosthetics amid the price-driven substitution with cheaper materials. The use of platinum in healthcare grew by 0.3 t driven by an increase in scheduled high-tech healthcare services after the peak of the COVID-19 response.

Jewellery. In 2022, global demand for platinum from the jewellery industry remained flat year-on-year. Jewellery sales fell in China, which accounts for over half of global platinum demand in this sector, caused by strict COVID-related restrictions; however, this drop was offset by demand recovery in other regions. The use of palladium in jewellery did not change year-on-year.

Glass industry. Platinum is needed to produce glass fibre and optical glass. Demand for the metal in this industry fell by 9 t in 2022 as China slowed down its glass capacity expansion after a ramp-up in previous years. The use of rhodium in this industry has also declined, partially due to manufacturers of bushings for the glass industry seeking to minimise the metal’s use because of its high cost.

Investments. Palladium and platinum are widely used as an investment instrument. Physical investments may vary from coins and smaller bars to investments in ETFs, which accumulate large amounts of the metals in standard bars. In 2022, palladium and platinum stocks in ETFs slipped by 2.8 t and 17.7 t to 16.0 t and 95.4 t, respectively.

Palladium: consumption by industry (%) and by application (t) in 2022
Platinum: consumption by industry (%) and by application (t) in 2022
Rhodium: consumption by industry (%) and by application (t) in 2022


Primary PGM production (t)
Source: Company data

In 2022, primary refined palladium, platinum and rhodium production decreased by 9%, 14% and 23% y-o-y to 198 t, 172 t and 20 t, respectively.

Production in the Russian Federation, the key producer of palladium, grew by 5 t driven by a recovery in production after a temporary shutdown of the Oktyabrsky and Taimyrsky Mines flooded by groundwater and suspension of operations at the Norilsk Concentrator in 2021.Platinum production stayed flat at 20 t.

In 2022, South Africa, the key producer of platinum and rhodium, saw a significant drop in PGM production (down 27 t for palladium, 31 t for platinum and 6 t for rhodium) due to the high base effect of 2021 when previously built-up work-in-progress inventories were drawn down in South Africa, power supply issues and smelting capacity shortages.

Primary platinum production in Zimbabwe rose by 1 t, while palladium and rhodium output remained flat year-on-year. Palladium and platinum production in the USA was down by 1 t due to the floods in Montana in July 2022.

The main sources of recycled PGM supply are scrapped auto catalytic converters. In 2022, secondary production of palladium, platinum and rhodium declined by 9 t, 5 t and 1.5 t to 81 t, 48 t and 8 t, respectively, due to supply chain disruptions and weak new vehicle sales, which in turn impacted the supply of older vehicles for recycling.