Rhodium trades above $17,000/oz for first time in six months

Rhodium prices traded solidly above $17,000/oz Feb. 8, with offers now approaching $18,000/oz, according to physical market sources.

Much of the demand appeared to be industrial, though some market source also suspected producer buying for contractual obligations.

"It's trading well above $17,000/oz, and offers are approaching $18,000/oz," one platinum group metals, or PGMs, refiner said, noting that prices quickly moved above the mid-$17,000s in the afternoon.

"It's hard to put a finger on what's driving it, but we're seeing some heavy interest today and the end of yesterday [Feb. 7]," the refiner added.

The strong buying on Feb. 7 resulted in the first trade above $17,000/oz in six months, a second PGMs refiner said.

"There were a couple of players looking to take some metal, and there hasn't been that much for sale," a second PGMs refiner said.

Rhodium last traded above $17,000/oz in mid-August 2021 but fell to $14,000/oz by the end of December.

Since the start of the year, the market has risen nearly 19.50%.

Some market players believe Chinese industrial consumers may be doing most of the buying following the end of the Lunar New Year holidays in Asia.

But base prices published by major European PGMs refiners for North America and Europe have risen faster than Asian prices.

UK-based refiner Johnson Matthey on Feb. 8 posted base prices for Asia at $16,925/oz, Europe at $17,100/oz and North America at $17,600/oz compared with $16,850/oz for all three regions on Feb. 4.

Germany-based Engelhard Materials Services on Feb. 8 set its base prices for Asia at $17,200/oz and the US at $17,500/oz, compared with $17,000/oz for both regions last week.

The Platts New York Dealer rhodium trading range was assessed at $16,600-$16,850/oz for the week ended Feb. 3.

More than 80% of annual demand for rhodium comes from the global automotive industry, which uses the metal in catalytic converters to control emissions of nitrous oxides and other greenhouse gases.

But global automotive production was hampered last year by coronavirus-related production slowdowns and a chronic shortage of semiconductor chips needed to operate many features in modern-day vehicles.