Nornickel Eyes New Applications to Offset Palladium Demand Decline
Nornickel, the world’s largest palladium producer, expects annual palladium demand in China to rise by 5-10 tonnes, or 7.6-15% of current consumption, from 2026-2027 as it develops new industrial applications for the metal. This comes as traditional consumption from internal combustion engine vehicles, which account for over 80% of global palladium use, continues to decline.
To counter falling demand from the automotive sector, Nornickel is exploring new uses for palladium in cooperation with scientists and potential customers. Key focus areas include hydrogen technology, water purification, biofuels, and solar energy. The company has already begun testing these applications with industrial partners and research institutions in Russia and China.
Nornickel’s Vice President of Innovation, Vitaly Busko, presented these initiatives at a conference in China, highlighting their potential to generate an additional 15 tonnes of annual palladium demand by 2030. Busko noted that China, which accounted for 22% (66 tonnes) of global palladium consumption in 2023, will likely play a central role in driving this new demand, particularly in sectors like hydrogen production and water purification.
The company forecasts hydrogen-related technologies alone could add 7-10 tonnes to annual palladium demand in the long term. Other emerging applications include glass fibre production, water disinfection electrodes, and microelectronics. Nornickel estimates global glass fibre production could require up to 5 tonnes annually, while microelectronics and electronics, where palladium is already in use, could contribute an additional 12-15 tonnes over time.
Busko emphasized that while China remains the largest consumer, Nornickel is also targeting markets in the Middle East, Malaysia, and Brazil to diversify demand. Despite Western sanctions, the company has successfully redirected its supply chains to Asia, which now accounts for 52% of its sales.
In 2024, Nornickel expects to produce between 82-85 tonnes (2.624-2.728 million ounces) of palladium. However, palladium prices remain under pressure, marking a fourth consecutive year of decline after falling 10% in 2024, following a steep drop of 39% in 2023.
