Quick overview

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UBS revised its price projections for palladium and platinum following a significant increase in both metals. Platinum prices have risen by almost $500 per ounce over the last four weeks, reaching a 17-year high, in part due to investor excitement over the European Commission’s proposal to relax its 2035 ban on combustion engine vehicles.

 

According to UBS strategists Giovanni Staunovo and Wayne Gordon, the action, along with slower-than-anticipated adoption of electric vehicles, has raised expectations that demand for platinum in autocatalysts may be sustained for longer.

Citing “higher investment demand and a tighter market,” they increased their platinum projections by $300 per ounce.

The team adopted a more circumspect stance regarding the longevity of platinum’s superior performance. They noted that demand for gasoline vehicle catalysts is more likely to cause palladium as platinum becomes more costly. “We will probably see the car if platinum continues to be significantly more expensive than palladium.”

Palladium has also increased significantly, hitting levels not seen in nearly three years.UBS raised its palladium price projections by $100 per ounce. According to Staunovo and Gordon, supply-side frictions and investment demand have tightened the palladium market more than anticipated. They cited remarks from Russian manufacturer Nornickel stated high lease rates have forced some glass and chemical companies to switch from leasing to direct purchases, further restricting availability. The bank cautioned that short-term volatility could be caused by policy uncertainty.

The results of the US Critical Minerals Section 232 investigation and a related antidumping petition are being closely monitored by investors. UBS noted that platinum and palladium bars shipped to the US may be re-exported to Europe if tariffs are not in place. Such flows could ease supply pressures in key hubs like London and Zurich.