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Rhodium Investment Fundamentals

Rhodium is extremely rare (harder to find than platinum, palladium, silver, or gold).

Rhodium is indeed rare with an estimated Earth’s crust concentration of 0.001 parts per million (ppm). In comparison silver is found in 0.075 ppm, platinum at 0.005 ppm, gold at 0.004 ppm, and palladium at 0.015 ppm in the Earth.

To give you better perspective, if we convert rhodium’s parts per million rarity into time, we would find 1 minute of rhodium in just over 1,900 year. For gold it would be more than 475 years, platinum over 380 years, palladium beyond 125 years, and silver some 25 years to one minute or metal recovery.

Part of a group of metals called the platinum group metals (platinum, palladium, ruthenium, iridium, osmium, and rhodium). These platinum group metals have similar chemical and physical properties.

A silver-white metallic element, rhodium is highly resistant to corrosion, and is extremely reflective of light. Often used in mirrors, searchlights, and jewelry. Rhodium is often alloyed with platinum for aircraft turbine engines or in electric connections. The manufacturing of nitric acid also uses trace amounts of rhodium.

Overall rhodium usage is dominantly used in catalyst applications where it is often combined  with platinum and palladium to help lessen car and auto emissions and pollutants.

Rhodium Price 1992 - 2016

Rhodium Price Chart Kitco Metals 1992 - 2016

Rhodium spot prices have witnessed 2 pronounced price manias over the past 3 decades and given how tight mining supplies have and can again become, the probability of future rhodium price spikes are nearly guaranteed to occur again.

The Rhodium Bubble of 2007 saw rhodium prices go from $500 oz USD in late 2006 to just shy of $10,000 oz USD in the summer of 2007. By the beginning of 2008 rhodium prices had again fallen back to around $1,000 oz.

What sparked the two separate rhodium buying frenzies?

A combination of demand in the American car industry, a bullish market in rare metals at the time and at least one large speculator or group of speculators on Wall Street leading a herd of investors.

Rhodium Price 1972 - 2006

Rhodium Price Chart Bubble Spike 1990 2007

In the early 1990s rhodium prices also experienced a dramatic increase higher rising to over $5,000 oz USD due to mining strikes in South Africa causing premiums to jump especially in 1990 and 1991 respectively.

Rhodium Supply Rhodium Demand Rhodium Investment Fundamentals

Rhodium Supply

Annual world rhodium production is only about 30 tonnes or 1,000,000 troy ounces per year.

The world’s main rhodium mining industry is in South Africa. About 80% of rhodium mine supply comes from South Africa.

Rhodium Supply Rhodium Miners Countries

The Russian Federation produces the next largest percentage of the world’s rhodium supply, about 12% yearly. The USA and Canada mine about 3% while Zimbabwe mines about 4% of the world’s annual rhodium supply.

World Rhodium Supply World Rhodium Demand

Rhodium Demand

On average the world uses nearly 1,000,000 troy ounce of rhodium per year although some years rhodium demand out strips supplies and visa versa.

Close to 80% of yearly rhodium supplies are used in catalytic converters for the automobile industry. Chemical uses account for about 10% of rhodium demand, glass applications approximately 5%, and the electrical industry and jewelry uses make up smaller single digit percentage rhodium demand.

Rhodium bullion buying is a virtual sliver of overall demand. Finding a trusted local or online reputable rhodium bullion dealer who promptly delivers quality rhodium bars at fair and reasonable prices is like the metal itself, rare indeed.

Our organization has been working in the rhodium and precious metals industry for over 40 years. We here at Kitco Metals both buy and sell rare rhodium bullion bars.

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