Palladium climbs over 2% on supply shortage concerns

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Palladium prices rose during Tuesday’s trading despite a stronger U.S. dollar against most major currencies, supported by expectations of a global supply shortage.

Sibanye-Stillwater, based in Johannesburg with operations in the U.S. and South Africa, has petitioned to impose tariffs on Russian palladium imports — a move that could further heighten price volatility. The company noted that Russian palladium is being sold below market value, particularly since the 2022 invasion of Ukraine. CEO Neal Froneman said tariffs would ensure a fairer competitive environment for the U.S. PGMs industry. A ruling on the petition is expected within 13 months.

Russia’s Norilsk Nickel (Nornickel), which controls 40% of global mined palladium, declined to comment. Sibanye-Stillwater itself booked a second consecutive annual loss last year, including a $500 million writedown on its U.S. palladium assets amid weak prices.

Spot palladium has risen 31% year-to-date, with analysts surveyed by Reuters expecting 2025 to mark the first annual gain in four years, driven by support from platinum. Still, Heraeus analysts warned that tariffs on Russian metal might not alter the supply-demand balance, but could redirect global trade flows and increase volatility.

According to Trade Data Monitor, Russia and South Africa remain the primary suppliers of palladium to the U.S., with China ranking second to the U.S. as a key buyer of Russian metal. U.S. imports of Russian palladium rose 42% year-on-year to exceed 500,000 troy ounces between January and May.

Palladium and PGMs are widely used in catalytic converters for gasoline vehicles. So far, Russian palladium has avoided U.S. sanctions tied to the Ukraine war, as well as import tariffs announced by President Donald Trump.

In a separate development, CME FedWatch data shows markets are pricing in an 86% probability that the Federal Reserve will cut interest rates by 25 basis points at its September meeting.

Meanwhile, the U.S. dollar index rose 0.4% to 98.1 by 15:45 GMT, touching a high of 98.6 and a low of 97.6. Futures for December palladium gained 2.5% to $1,152.5 per ounce at the same time.