Summa Silver Corp. (TSXV: SSVR, OTC: SSVRF, FRA: 48X)
Silver Lives Here
Since hitting an all-time high of $3,002 per ounce in February 2022, palladium prices have been on a steady decline. As of January 15, 2025, palladium is trading at $953.50 per ounce, still maintaining a premium over platinum’s $932.70. Looking forward to 2025, palladium’s fundamentals are expected to weaken slightly due to oversupply and decreasing demand, particularly from the auto sector.
Throughout 2024, palladium prices fluctuated between $900 and $1,100 per ounce, with a brief surge to $1,200 in October. The spike was driven by geopolitical factors, specifically tighter sanctions proposed by the U.S. Treasury on Russian precious metals. Russia remains one of the largest global suppliers of palladium and other platinum group metals. By the end of the year, market conditions stabilized despite overall downward pressure on prices.
The auto sector remains the driving force for palladium demand, accounting for 80% of usage, mainly for catalytic converters. However, the industry’s shift toward electric vehicles (EVs), which don’t require palladium, continues to erode demand.
Global automobile sales are projected to increase by 1.7% to 89.6 million units in 2025, but EVs will grow their market share to 16.7%, up from 13.2% in 2024. However, the rapid pace of EV adoption is slowing due to market saturation and concerns over charging infrastructure and vehicle range.
The incoming Trump administration has proposed significant trade and economic policies that could impact palladium markets. Notably, a 25% tariff on goods from Canada, Mexico, and other trading partners could severely affect the automotive sector in North America, increasing costs and reducing demand.
Additionally, the proposed elimination of EV subsidies could raise the price of new electric vehicles by as much as $7,500, potentially influencing consumer behavior and overall demand for vehicles containing palladium.
Demand:
Supply
The bearish outlook is attributed to weak demand from the auto sector and growing supply through recycling and mining, leading to a surplus in the market.
Analysts expect palladium to exhibit a weaker market performance in 2025, with prices likely to hover near the lower end of forecasts. The demand erosion caused by the auto industry’s electrification and an expanding supply surplus are the primary factors influencing this trend. Investors should closely monitor geopolitical developments, trade policies, and alternative uses of palladium as key determinants of the metal’s future trajectory.
