BMI cuts platinum and palladium forecasts as car sales shrink

Research house BMI trimmed its price forecasts for both platinum and palladium in mid-2026, pointing to two forces working against the metals: a slowdown in global car sales, which reduces demand for the catalytic converters that remain platinum and palladium's largest end use, and signs that South African PGM supply, the dominant source of both metals, was recovering after years of operational disruption.

The revision came as palladium in particular extended a difficult run: the metal had already been trading well below its own historic highs, and the combination of softer demand assumptions and improving South African output further reduced the case for a near-term rebound.

A supply-side story, for once

Much of 2026's PGM narrative had centred on demand-side surprises and price shocks, from rhodium's rapid rally and reversal to platinum's record highs. BMI's forecast cut was notable for emphasising the supply side instead: a recovering South African production base, after a period in which safety stoppages, power constraints and lower ore grades had repeatedly curtailed output, threatened to erode some of the structural deficit that had underpinned the sector's rally.

Diverging fortunes within the PGM basket

The forecast cuts did not apply evenly across the PGM complex. Separate analysis from Metals Focus around the same period argued that platinum and rhodium were still likely to outperform palladium in 2026, reflecting palladium's particular exposure to the structural decline of internal combustion engine vehicles and their gradual replacement by battery electric models that use little or no palladium, a divergence that complicated hedging and production decisions for South African producers selling a blended basket of all three metals.

South African producers said they were watching the forecast recovery in domestic PGM supply closely, since a genuine rebound in output, layered on top of softer demand, risked narrowing the very deficits that had underpinned the sector's exceptional pricing through 2025 and into 2026.

Automakers, for their part, continued to signal a gradual reduction in demand for both metals as electric vehicle penetration rose, a structural headwind that South African PGM producers acknowledged would require continued diversification of end markets over the coming decade.

Sources

• Mining.com: Platinum, palladium price forecasts cut by BMI as car sales shrink and South African supply recovers, 10 Jun 2026
• Mining.com: Platinum, rhodium to outperform palladium in 2026, Metals Focus forecasts, 15 Jun 2026

Photo: Platinum crystals; BMI cut its platinum and palladium price forecasts in mid-2026 as South African supply recovered. Periodictableru, Wikimedia Commons, CC BY 3.0.