Global palladium mine supply is on a declining trajectory, with Johnson Matthey and WPIC forecasting a compound annual decline of approximately 1.1 percent through 2029. Russia and South Africa together supply approximately 75-80 percent of mined palladium, creating extreme geographic concentration risk.
Nornickel, the world's largest palladium producer accounting for approximately 40 percent of global supply, faces operational constraints including aging infrastructure, geopolitical risks from sanctions, and the need for significant capital investment to maintain output levels. Any disruption at Nornickel operations would have an outsized impact on global supply.
South African palladium production is primarily as a by-product of platinum mining, meaning palladium supply is largely determined by platinum mining economics. With several South African PGM mines operating at reduced capacity or facing closure decisions, palladium by-product output is at risk.
The supply decline is expected to keep the palladium market in deficit or near-balance through 2026, despite the demand headwinds from automotive electrification. However, the trajectory is highly uncertain and depends on the pace of EV adoption, substitution rates, and Russian supply stability.