Strategic Metals (PGMs)
Platinum Group Metals - Ultra-rare catalysts for automotive, defense, and industrial applications
PGM Market Overview 2026
All 5 PGMs (Pt, Pd, Rh, Ir, Ru) in structural supply deficit due to South African mine challenges
80%+ of palladium and rhodium demand from catalytic converters for emission control
Rhodium and iridium among Earth's rarest elements, more precious than gold
What Are Platinum Group Metals?
The Platinum Group Metals (PGMs) are six rare, chemically similar metallic elements clustered together in the periodic table:
- • Platinum (Pt) - Jewelry, catalysts, hydrogen fuel cells
- • Palladium (Pd) - Gasoline auto catalysts, electronics
- • Rhodium (Rh) - Catalytic converters (most effective)
- • Iridium (Ir) - Spark plugs, crucibles, PEM electrolyzers
- • Ruthenium (Ru) - Hard disk drives, chip resistors
- • Osmium (Os) - Specialized industrial (minor commodity)
Key Characteristics
- ✓ Extreme Rarity: Combined PGM production ~600 tons/year (gold: 3,000 tons)
- ✓ Concentrated Supply: 80% mined in South Africa, 10% Russia (geopolitical risk)
- ✓ High Melting Points: Rhodium 1,964°C, Iridium 2,446°C (extreme durability)
- ✓ Catalytic Properties: Accelerate chemical reactions without being consumed
- ✓ Corrosion Resistant: Do not tarnish or oxidize under normal conditions
Palladium (Pd)
Primary gasoline catalytic converter metal
2026 Price Outlook
- • Trading Range: $900 - $1,500/oz (high volatility)
- • Average Target: $1,200/oz consensus forecast
- ⚠ Historical Context: Down from $3,000+ peak in 2022 during Russian supply fears
- ↓ Pressure: EV transition reducing gasoline vehicle production (70% of demand)
- ✓ Support: Supply deficit (200,000 oz/year) preventing deeper crash
Supply & Demand Dynamics
- ⚠ EV Threat: Gasoline vehicle sales declining 5-7% annually, direct impact on palladium
- ✓ Supply Deficit: Structural 200,000 oz shortage despite demand headwinds
- ✓ South Africa Risks: Power outages, labor strikes constraining mine output
- ✓ Russia Sanctions: 40% of global supply under potential export controls
- ⚠ Substitution: Platinum increasingly used in catalysts (cheaper alternative)
Investment Strategies
Tactical Bounce Play
Range trade $900-1,500. Russian sanction risk offers asymmetric upside. Short-term (1-2 year) only due to EV headwinds
Risk Management
Avoid long-term hold (5+ years) as EV adoption will structurally reduce demand. Use stop-losses below $850/oz
Rhodium (Rh)
World's most expensive metal (at peak)
2026 Price Outlook
- • Current: $4,400/oz (collapsed 85% from $30,000 in 2021)
- • 2026 Range: $3,500 - $6,500/oz (extreme volatility)
- • Baseline: $5,000/oz mid-year target
- ⚡ Spike Risk: Supply shock could push to $10,000-15,000 (happened 2021)
- ⚠ Downside: Further EV penetration could test $3,000 support
Market Fundamentals
- ⚠ Extreme Rarity: Only 32 tons produced globally per year (vs 3,000 tons gold)
- ✓ Irreplaceable: No substitute for NOx reduction in catalytic converters
- ✓ Supply Deficit: 80,000 oz structural shortage annually
- ⚠ Auto Dependent: 80% demand from catalytic converters (EV threat)
- ⚠ Low Liquidity: Tiny market size creates price swings of 50%+ in months
Investment Strategies
High-Risk Speculation Only
Extreme volatility (85% drawdown from peak). Options on miners (Sibanye-Stillwater, Anglo American Platinum) for tail-risk exposure
Supply Shock Catalyst
South African mine strike or power crisis could spike prices 100-200%. Position sizing critical (max 2-3% portfolio)
Platinum (Pt)
Most versatile PGM - covered in Precious Metals section
Note: Platinum serves dual roles as both a precious metal (investment, jewelry) and strategic PGM (catalysts, hydrogen economy). For comprehensive platinum analysis including hydrogen fuel cell applications and supply deficit projections, please visit the Precious Metals page.
Other Critical PGMs
Iridium (Ir)
- • Rarity: Rarest stable metal on Earth, only 7 tons mined annually
- • Primary Use: Spark plugs, crucibles for crystal growth, PEM electrolyzer anodes
- ✓ Hydrogen Economy: Critical for green hydrogen production via electrolysis
- ✓ Electronics: X-ray tubes, LCD displays, nitric acid production
- ⚠ Supply: Entirely byproduct of platinum/nickel mining, no primary mines
- ✓ 2026 Outlook: $4,800 - $6,000/oz, hydrogen demand driving long-term growth
Investment: Difficult to trade directly. Exposure via platinum miners (Anglo American Platinum, Sibanye) or green hydrogen infrastructure plays
Ruthenium (Ru)
- • Production: 30 tons annually, primarily from Russia (80%) and South Africa
- • Electronics: Chip resistors, hard disk drives, supercapacitors
- ✓ Platinum Alloys: Improves hardness for jewelry, electrical contacts
- ✓ Catalysts: Chemical production, hydrogen evolution reactions
- ⚠ Russia Concentration: 80% supply creates sanction vulnerability
- ✓ 2026 Outlook: $400 - $550/oz, tech demand stable, Russia risk premium
Investment: Minimal trading infrastructure. Industrial buyers only. Long-term tech/semiconductor exposure via mining diversified producers
Iridium & Ruthenium Investment Note
Both metals lack liquid futures markets or dedicated ETFs. Direct investment requires physical purchase from specialized dealers (high premiums, storage issues) or exposure through diversified PGM miners. Long-term theme: Green hydrogen (iridium) and advanced electronics (ruthenium) should drive demand growth 2026-2035, but illiquidity makes them unsuitable for most investors.
2026-2030 PGM Market Outlook
Structural Bullish Factors
- ↑ Supply Deficits: All 5 major PGMs (Pt, Pd, Rh, Ir, Ru) in structural deficit. South African output declining 2-3% annually due to aging mines
- ↑ Geopolitical Risk: 80% of PGMs from South Africa + Russia. Sanctions, strikes, power outages create supply shocks
- ↑ Hydrogen Economy: Iridium and platinum critical for green hydrogen electrolyzers and fuel cells (10x demand growth by 2030)
- ↑ Defense Spending: Military applications for PGMs in aerospace, electronics, weapons systems expanding
Bearish Pressures
- ↓ EV Transition: Electric vehicles don't need catalytic converters. Palladium and rhodium demand from autos (80% of market) declining 5-7% annually
- ↓ Recycling Growth: 30% of PGM supply from recycled catalytic converters by 2030, offsetting mine declines
- ↓ Substitution: Platinum replacing palladium in catalysts (cheaper). Research into non-PGM catalysts advancing
- ⚠ Volatility: Tiny markets (1-7 tons annually) create 50-200% price swings, unsuitable for conservative investors
PGM Supply Deficit Summary (2026)
Investment Recommendations
PGM Investment Key Takeaways
Why Invest in PGMs?
- ✓ Extreme rarity and supply concentration create supply shock potential
- ✓ Hydrogen economy growth driving iridium and platinum demand
- ✓ All 5 PGMs in structural deficit despite demand headwinds
- ✓ Geopolitical diversification (most metals concentrated in 2 countries)
Risks to Consider
- ⚠ EV transition destroying 80% of palladium/rhodium demand long-term
- ⚠ Extreme volatility (50-200% price swings in months) unsuitable for conservative investors
- ⚠ Low liquidity and minimal trading infrastructure for iridium/ruthenium
- ⚠ Recycling growth offsetting mine supply declines