Nornickel's furnace shutdown hits a palladium market already in deficit
Russia refines 42% of the world's palladium. The 2024 furnace hit, scaled to nine months, comes to about 300,000 oz.
Nornickel's nine-month overhaul of a flash-smelting unit at its Nadezhda plant, due to start in 2027, lands on the world's biggest palladium supplier and a market that is already short. Russia will refine 2,465 koz of the world's 5,830 koz of palladium this year, or 42%, according to SFA (Oxford) supply-demand tables from August.
Nornickel said on Oct 26 the work may cut key-metal output in 2027 and possibly 2028. It has not said by how much.
Sizing the outage
In February, Norilsk division head Alexander Leonov put the shutdown at about 270 days, with about half of the plant's capacity idle while it lasts, Reuters reported. Part of the Norilsk copper plant would make nickel matte instead to offset it.
The last rebuild gives a reference point. Nornickel planned a 60-day rebuild of flash furnace No. 2, one of Nadezhda's two, in 2024. Nornickel's palladium output fell 10% quarter on quarter to 606 koz in Q4 2024, which it blamed on the repairs. If the whole drop came from the repairs, the loss was about 67 koz.
Scaled to 270 days, the same hit would be about 300 koz, by Ore Daily's calculation. That equals about 80% of SFA's 2026 deficit and 5% of world refined supply. It is an illustration, not a forecast. It assumes losses scale with time, and the copper-plant workaround aims to soften the 2027 hit.
A shrinking market, still short
SFA's tables show a palladium deficit in every year from 2022 to 2026, adding up to 2.85 Moz. Russian refined output falls 260 koz, or 9.5%, this year. Gross autocatalyst demand is down 8.8% since 2022, and total net demand 10.6%. Recycling, at 3,010 koz, makes up 34% of total supply (refined plus recycled) this year, the highest share in the five-year table.
Maintenance at Nadezhda has already dented platinum. Russia's second-quarter platinum supply slipped to 148 koz, 6% below a year earlier, partly on maintenance at the Nadezhda smelter, according to WPIC and Metals Focus.
Nornickel's run to year-end
Nornickel produced 736 koz of palladium in the third quarter, up 25% from the second, and 1,934 koz in nine months, down 4%. It kept 2026 guidance at 2,415-2,465 koz and expects to finish near the upper end. Even the top of the range implies fourth-quarter output of 531 koz, 28% below the third quarter.
SFA's Russian line tracks the company closely. Its 2024 figure, 2,760 koz, matches Nornickel's reported 2.76 Moz, and its 2026 estimate sits at the top of guidance. Since July, Nornickel's Kola plant has been its only site making palladium concentrate; its chief technologist puts the region's output at about 40% of world palladium production.
Price: down from January, below platinum
Palladium averaged $1,309/oz in September, IMF data show, up 11% from a year earlier but 29% below January's $1,841. Platinum averaged $1,786, a 36% premium. Palladium last averaged more than platinum in January 2025. Spot palladium hit a 13-month low of $1,080 on Oct 21.
In platinum, WPIC and Metals Focus forecast a 265 koz surplus for 2026, after three years of deficits. Their first 2027 forecasts are due in November.
Sources SFA (Oxford) PGM supply/demand tables, Aug 2026 · MINING.COM (Reuters), Oct 26 · Reuters via Kitco, Feb 13 · TASS (2024 output) · 360.ru (2024 furnace rebuild) · The Barents Observer · WPIC Platinum Quarterly Q2 2026 (Metals Focus) · Palladium and platinum prices (IMF) · Trading Economics