Rhodium: The Embarrassment Of Riches

December 14, 2011

All that glitters is not gold ...


On May 19, 2011, Deutsche Bank issued db Physical Rhodium ETC securities. Johnson Matthey recently (Nov. 15, 2011) forecast that the metal will remain in surplus (by 123,000 troy ounces (one troy ounce (oz) = 31.10 grams)) in 2011, and now its price has fallen from a "stratospheric" level of over $10,000/oz in June 2008 to "languish" around $1,700 (midprice on Nov. 30, 2011), somewhat lower than that of gold. So, what's with rhodium?

The PGMs

The platinum group metals (PGMs), of which rhodium is one, are a group of six metals clumped together pretty much in the middle of the periodic table. The others are iridium, osmium, palladium, platinum and ruthenium. The metal, which is extremely difficult to separate from the other metals with which it naturally occurs (including the other PGMs), is always produced as a byproduct of the extraction of these others; no such thing as a rhodium mine exists.

The English chemist, William Hyde Wollaston discovered the metal in 1803, soon after he discovered palladium and around the same time Smithson Tennant (also English) discovered both osmium and iridium.

The rarity of the metal, the fact that it is a byproduct, and the complexity of (and costs involved in) its extraction have all, historically, contributed to robust pricing over the last 80 years, and especially in the last couple of decades.


Average Annual Price of Rhodium – 1930-2010 (US$ per oz)


Source: U.S. Geological Survey


Uses Of Rhodium

A hard, durable and highly reflective metal with high electrical conductance, rhodium has three main uses:

– Autocatalysts

– Glass manufacturing

– Catalysts


Rhodium is also used, to a considerably lesser extent, for and in:

– Electroplating (e.g., reflectors)

– Electrical contacts (e.g., reed switches)

– Jewelry (e.g., plating (for durability) or, indeed, as a solid metal)


Rhodium – Forecast Gross Demand in 2011


Source: Johnson Matthey


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