Rhodium demand could increase, but prices won’t
13 August 2013
Lacklustre demand for rhodium could give buyers looking for good
value an attractive entry point.
The white metal, which is in the platinum family, is lagging
behind other metals in the group, but poor demand and a supply
surplus suggest it could see further losses this year, according to
It hit a nine-year low in July at just $925 an ounce and
RHOD-LON was performing at $960 per ounce on Monday. It's
trajectory is in stark contrast to other metals in the platinum
group, which is expected to outperform gold and silver this
However, analysts have urged buyers to be cautious, as demand
for rhodium for use in catalytic converters from car manufacturers
has remained low and does not show signs of improving in the near
"Rhodium's problem is that it's got to the point where, over the
last six or seven years, it's been thrifted out of catalysts, and
catalysts are 85% of the demand," Johnson Matthey general manager
Jeremy Coombes told the news source.
"Rhodium is still a great catalyst, and looking forward to the
Euro VI (emissions) regulation next year, there is still a
possibility that rhodium could come more into play, because it's
particularly useful at controlling nitrogen oxides emissions. But
that is still a little way off."
While demand remains subdued and above-ground stockpiles are
high, rhodium is unlikely to see much movement in price.
However, an analyst from Deutsche Bank AG suggested that the low
price and favourable performance of rhodium catalytic converters
could see car markers turn back to the metal.
"Given that rhodium is much better than palladium at treating
nitrous oxide gases and given that the ratio has gone close to
parity, it makes sense if you're an auto manufacturer and want to
capitalise to add more rhodium to the mix," Grant Sporre, an
analyst at Deutsche Bank in London, told Bloomberg.
"Rhodium does look interesting at these levels."
Nevertheless, speaking to Reuters, Mr Sporre conceded that it
may be another couple of years before rhodium prices see any
movement. He said that five years of market surplus have left a
strong stockpile of reserves that would more than meet demand
increases, even in the face of threats to supply from South
Rhodium, near 9-yr low, to fall further to reach bottom
Rhodium Seen by Deutsche Bank Benefiting Over Palladium in Cars