Market Report

No. 12 | 24^th March 2025

Secondary PGM supply has been in decline since peaking along with PGM prices in 2021. Since then, the recycling industry has seen declining volumes in tandem with the fall in metal prices. The majority of secondary supply is sourced from spent autocatalysts, with the balance recycled from electronic waste and jewellery. The restricted supply of new cars owing to the semiconductor chip shortage played a part as older vehicles were kept on the road, reducing scrapped vehicle numbers. Many people purchase a car using financing and the rising cost of new and used vehicles along with higher interest rates has also been a factor in consumers keeping their existing cars for longer.

China could drive a recovery. Global secondary palladium supply from autocatalyst recycling held at a little over 2 moz last year. In China, the trade-in subsidy to purchase a new car resulted in a sharp increase in the number of scrapped vehicles in 2024, lifting recovered PGM volumes. The subsidy has been extended to 2025 which should further boost autocatalyst recycling there. In the US, the largest region for autocatalyst recycling (~50% of total), new light vehicle sales are forecast to hit 16.2-16.4 million units this year, up from 16.0 million in 2024. Western Europe is also expected to see modestly higher new car sales this year. After a poor year for new car sales in 2024, Japan is predicted to see a strong rebound this year. Rising new vehicle sales could see a larger number of vehicles being scrapped and improved secondary palladium supply volumes.

Trump’s tariffs on Canada and Mexico are a risk to new vehicle sales. The tariffs may not have much direct impact on recycling volumes overall, as any catalysts that might have been imported to the US from Canada or Mexico will most likely be processed elsewhere and still be recycled. However,  if new vehicle prices rise or fewer vehicles become available and sales fall, that could have a greater impact and more consumers may look to purchase second-hand cars, thus reducing the number of older vehicles being scrapped. In this instance though, the reduction in supply from recycling may be outweighed by the fall in demand resulting from fewer new vehicles.

The palladium market is predicted to see a modest surplus this year, partly as a result of higher levels of recycling. The palladium price has mostly traded between $1,100/oz and $900/oz for the last year and, without clear stronger demand, a breakout to higher prices seems unlikely.

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