Rhodium is a silvery-white metal known for its shiny finish and corrosion resistance. It’s considered the rarest and most valuable metal on Earth, even more precious than gold or silver. Its main use is in catalytic converters designed to clean car exhaust. Rhodium, often combined with palladium and/or platinum, helps reduce nitrogen oxide emissions.
On January 13, 2021, rhodium prices hit $20,190 per ounce, up from $16,990 on December 31, 2020, and a mere $615 back in 2016.
Rhodium Price Chart
That means rhodium prices have surged 3000% in just five years. Today, 1.5 kilograms of rhodium is worth nearly $1 million.
Rhodium Price Increase Over Time
Automakers consume about 85% of the world’s rhodium supply. As car sales bounce back quickly, demand for rhodium is skyrocketing, making the market even tighter.
Meanwhile, the Covid-19 pandemic has seriously disrupted supply. Lockdowns have slowed mining and transport in South Africa, the world’s top rhodium producer.
On top of that, Anglo American Platinum (Amplats) had to temporarily halt processing operations, further cutting supply. Experts from Metals Focus, including consultant Wilma Swarts, estimate rhodium supply dropped 16% in 2020.
With supply down 16% but demand only falling 10%, the market faced a shortage of about 1 million ounces in 2020. This deficit is expected to continue into 2021, likely pushing prices even higher.
Rohit Savant from CPM Group explains that rhodium has been in short supply almost every year for the past decade. This has drained reserves and forced users to buy more to make up for the shortfall, tightening the market and driving prices up.
Savant adds that on average, 2020 saw a slight surplus, and 2021 is forecasted to have a small surplus too. He expects prices to pause or even dip slightly during the year-end holidays. But “Looking ahead, the surplus will shrink again and the market will likely return to a shortage.”
Rhodium Market Faces Shortages Almost Every Year
Source: Refinitiv
