Rhodium is skyrocketing and shows no signs of stopping . Since the beginning of 2021 alone, prices have increased 19% as automakers need the metal to meet stricter emissions regulations amid tight supplies.
A silvery-white metallic element with a highly metallic luster and corrosion resistance, rhodium is considered the rarest and most valuable metal on the planet – above gold or silver. The primary use of this metal is in catalytic filters designed to clean vehicle exhaust. Accordingly, rhodium – often combined with palladium and/or platinum – reduces the amount of nitrogen oxide in the exhaust.
The rhodium price on January 13, 2021 increased to ,190 per ounce , compared with ,990 on December 31, 2020, and compared with just 5 in 2016.
Thus, in just the past 5 years, the price of rhodium has increased by 3000%, and now just 1.5 kg of rhodium is worth nearly 1 million USD.
Automakers consume about 85% of the global supply of rhodium. The rapid recovery of automobile demand makes the demand for Rhodium even stronger, and the market becomes more and more scarce.
Meanwhile, the Covid-19 pandemic has seriously affected the supply, because many places were forced to blockade against the epidemic, mining and transportation activities in South Africa – the world’s largest rhodium producing country – interruption.
In addition, the shutdown of Anglo American Platinum (Amplats) processing facilities further reduces supply during this period, with total Rhodium supply in 2020 down 16%, according to the consultant. Wilma Swarts of the consulting firm Metals Focus.
A 16% drop in supply while a 10% drop in demand leaves the market short by about 1 million ounces in 2020, and is expected to continue to short in 2021, possibly pushing prices up further.
The market for rhodium has been in short supply for most of the past decade, causing stocks to shrink and forcing users to ramp up purchases to make up for it, said Rohit Savant, a consultant at consulting firm CPM Group. reserves decrease, depleting supply in the market and driving prices up.
According to Mr. Savant, if calculated on average for the whole year, the market in 2020 will have an oversupply with a small volume, and in 2021 it is forecasted that there will be a little oversupply. He said that, as usual, prices will pause to increase, even decrease slightly during the Tet holiday period at the end of the old year – at the beginning of the new year. But “In the future, you will see the oversupply continue to shrink, and the market will likely return to a shortage.”
