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With strong demand for platinum group metals (PGMs) continuing, Bank of America Securities Global Research has raised its 2026 platinum price forecast to $2 450/oz from $1 825/oz and its 2026 palladium price forecast to $1 725/oz from $1 525/oz.
Key takeaways from the bank's latest Global Metals Weekly dated January 9 are that the dislocations of PGMs from trade disputes are keeping markets tight, especially in the case platinum. In addition, China's platinum imports are adding support.
While a supply response is likely, the bank expects this response to be gradual owing to what it describes as "production discipline and inelastic mine supply".
The forecasts arise amid platinum and palladium prices continuing to rally this year, with spot prices reaching $2 446/oz for platinum and $1 826/oz for palladium.
As such, both metals have now exceeded the bank's prior projections, thus the increased price forecasts.
"We continue to expect platinum to outperform palladium, underpinned by persistent market deficits," the bank stated in a release to Mining Weekly.
The bank reports that US tariffs have had a pronounced impact on a range of metal markets and the risk of duties is still hanging over the PGMs.
This is one reason why Chicago Mercantile Exchange inventories have risen and exchange for physical (EFPs) have spiked.
Palladium EFPs have outperformed, heavily influenced by growing concern that the US could impose duties on Russian palladium under ongoing anti-dumping and countervailing duty investigations.
Putting some concrete numbers behind that, the banks reports that dumping margin of unwrought Russian palladium was estimated by the US Department of Commerce at about 828 %.
Duties on yet-to-be-announced Russian ounces could, the bank reports, drive domestic prices even higher, given the country is a key supplier.
CHINESE IMPORT DEMAND ADDS FURTHER SUPPORT
Outside the US, China has also given price support. Earlier in 2025, a sharp rebound of activity in its jewellery sector drew more ounces into China and with gold prices at record highs, this is worth following as a substitution of just 1% in gold jewellery demand could raise the platinum deficit by nearly one million ounces or about 10% of supply.
Meanwhile, through the second half of 2025, the launch of physically backed platinum and palladium futures contracts by China's Guangzhou Futures Exchange (GFEX) has added further price support.
As context, these contracts are China's first domestic, Renminbi-denominated hedging instruments for PGMs and allow physical delivery of both ingot and sponge metal. The sourcing of physical liquidity is cited as a key factor behind December's rally.
Palladium importation has also quadrupled since September compared with last year, which the bank notes is fundamentally hard to explain given the phase-out of
combustion engine vehicles and looks to be heavily influenced by the launch of the GFEX futures contract.
GRADUAL SUPPLY RESPONSE EXPECTED
With PGM prices now trading above both marginal costs and incentive prices, the supply response is coming into focus.
"We expect any response to be measured. Producers' margins – particularly in South Africa and North America – have been under sustained pressure over the past two years, so they may take a cautious approach to expanding production," the bank noted.
As for new supply, additions are likely to emerge only gradually, given the long lead times from development through to the steady-state output.
Many projects underway represent incremental expansions or phased ramp-ups rather than sources of large, near-term increases in supply.
Switching to supply, production issues in South Africa also contributed to a tighter platinum market in 2025. To that point, mined ...

Significant 2026 platinum price rise forecast by Bank of America Securities

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