The great divergence
For decades platinum traded above palladium. That flipped after 2015, when diesel's share of the European car market collapsed following the emissions scandal. Diesel catalysts are platinum-heavy; gasoline catalysts are palladium-heavy. Tightening emissions rules also raised the palladium loading per vehicle just as supply stayed flat — most palladium comes as a byproduct of Russian nickel and South African platinum mining, so it cannot respond to its own price.
The result was a squeeze: palladium rose from under 600 dollars an ounce in 2015 to above 3,000 dollars at its 2022 peak, trading at more than triple platinum's price.
The reversal
Markets respond to 3,000-dollar palladium. Automakers engineered substitution, reformulating gasoline catalysts to use more platinum and less palladium — a slow process requiring re-certification, but it compounds every model year. At the same time, battery electric vehicles, which use no autocatalyst at all, took a growing share of new car sales. Palladium fell back below 1,000 dollars at points in 2024, erasing the entire premium and then some.
Where that leaves both metals
Palladium's problem is that its demand is roughly eighty to ninety percent autocatalysts — a shrinking segment — with no large alternative use in sight. Platinum keeps autocatalyst exposure too, but adds jewelry, industrial uses, investment demand, and the hydrogen fuel cell option. Substitution toward platinum has a long way to run, which supports platinum at palladium's expense, though both face the structural headwind of declining combustion engine production over time. Neither metal is a clean long-term hold on demand grounds alone.
Trading considerations
These are small, illiquid markets compared to gold or copper. Platinum trades in 50-ounce contracts on NYMEX; palladium is 100 ounces, and palladium's daily swings can be extreme, with thin order books exaggerating every move. Spreading the two metals against each other is a classic trade, but spreads can stay wrong longer than a leveraged account can stay solvent. If you follow only one data point in this market, follow auto production mix — the split between combustion, hybrid, and battery electric — because it is the demand driver underneath everything else. Futures trading involves substantial risk of loss and is not suitable for all investors.