Key Highlights

● Palladium fell 1.43% to $999.50 an ounce in Thursday's session.

● The metal is down 17.61% on the month and 39.51% since January.

● Autos account for over 80% of palladium demand, and car sales are weakening.

● Sibanye-Stillwater's US basket price averaged $1,672 per 2E ounce in the first half.

Palladium futures fell 1.43% to US$999.50 per troy ounce in Thursday's session on 29 October, extending a slide that has taken the metal to its lowest level since June 2025. The drop matters to platinum group metals miners such as Sibanye-Stillwater (NYSE:SBSW), which produces palladium and platinum at the Stillwater and East Boulder mines in Montana.

Palladium is down US$14.50 on the day, 5.44% on the week and 17.61% on the month. It has lost 39.51% since the start of the year and is 32.43% below a year ago, making it one of the weakest metals on the board. Platinum fell 3.64% and gold 1.45% in the same session.

Falling Demand Meets a Supply Cushion

The palladium market is squeezed from the demand side while supply offers only limited support. Car demand is cooling, investors are leaving the metal and traders have lowered their price forecasts. A modest recovery is expected in 2027 if demand for hybrid catalysts stays stable, but that is a long way off for a market now trading below US$1,000.

Why Cars Matter So Much

Autos account for more than 80% of palladium demand, mostly through catalytic converters in petrol vehicles. That concentration is the metal's weak point. Rapid adoption of electric vehicles, weak vehicle sales and tighter consumer spending are all cutting into the outlook, and higher borrowing and fuel costs are making cars harder to buy.

There is also a shift inside the converter. Carmakers have been moving towards platinum in catalytic converters, which adds to long-term concern about palladium demand. Hybrid vehicles, which still need autocatalysts, have limited the damage. In July, hybrid demand helped futures recover above US$1,200 after the price nearly reached a one-year low at the end of June, but the metal has since fallen well below that level.

Investors Step Back

Persistent investment outflows have added to the pressure. Palladium pays no yield, so when the Federal Reserve holds rates steady and markets price another increase by the end of the year, the metal loses appeal for investors. Surging energy costs linked to the conflict in the Middle East have fed inflation concerns and strengthened that view.

Supply Offers Limited Support

On supply there is little to counter the weak demand story. Key producing countries have reported no major disruptions and recycling flows are steady, which has eased the shortage fears that once supported prices. A surplus is projected across the platinum group metals complex, and Nornickel, the world's largest palladium producer, forecasts a surplus for 2026.

Constrained Russian output is the main support. Nornickel has warned that an overhaul at one of its plants could extend into 2028, which would limit supply for longer.

What It Means for Sibanye-Stillwater

Sibanye-Stillwater is a primary producer of platinum group metals, with US operations at Stillwater and East Boulder and large operations in South Africa. Its first-half 2026 report showed US production of 137,930 2E ounces, platinum plus palladium, down 2% from a year earlier because of lower grades at East Boulder.

The average US 2E basket price was US$1,672 per ounce, against US$985 a year earlier, and all-in sustaining costs were US$1,347 per 2E ounce. Adjusted EBITDA for the US operations was US$66 million, down from US$151 million, which the company attributed mainly to the timing of Section 45X manufacturing credit income.

Those are first-half figures that predate the latest fall in palladium. A basket price also includes platinum, rhodium and other by-products, which move differently from palladium, and the group's large South African operations mean its shares do not track palladium alone.

Palladium Watch: Car Sales, Surplus Estimates and Producer Updates

Monthly car sales data from the United States, Europe and China will show whether the demand concerns are deepening or easing. Third-quarter operating updates from platinum group metals producers and Nornickel's statements on supply and surplus will give more detail on the other side of the market.

Palladium could find support if car sales stabilise, if hybrid output strengthens, if the shift to platinum slows or if a producer interrupts supply. It could stay under pressure if investment outflows continue, if the projected surplus is confirmed or if rate expectations keep rising.