The economic incentive for automakers to substitute platinum for palladium in catalytic converters continues to strengthen. With palladium at $1,216/oz and platinum at $1,646/oz, platinum is $430/oz cheaper despite having higher density and providing comparable catalytic performance.
JPMorgan estimates that substitution added 250,000 ounces of platinum demand in 2025 and expects 400,000 ounces in 2026. “The cost differential is too large to ignore,” an analyst at JPMorgan said. “At current spreads, a typical gasoline vehicle catalyst can save $15-20 per unit by switching from palladium to platinum.”
The substitution is most advanced in North America and Europe, where emissions standards are most stringent and automakers have already completed most of the engineering validation for platinum-based catalysts. Chinese automakers are lagging but beginning to accelerate their conversion programs.
Palladium prices also rose on Friday, gaining 3.03% to $1,216, as supply concerns from Russia — which accounts for 40% of global palladium output — persist. Nornickel’s production guidance for 2026 was revised downward by 3% due to equipment maintenance issues.
The platinum-palladium substitution trend is structural and will reshape demand balances for both metals. Buyers reliant on palladium for supply chains should evaluate whether platinum-based alternatives are feasible for their applications. Palladium purchasers face a dual risk: supply concentration in Russia and demand erosion from substitution.