Rhodium prices jump to nine-month high in July
Market expects autocatalysts' demand to spur sales, prices
Tom Stundza -- Purchasing, 7/27/2009 11:35:02 AM
Expectations of second-half improvement in world automotive production have sparked a July jump in price for rhodium, the platinum group metal used to make catalytic converters. New York dealers prices for rhodium prices are $1,550/troy ounce today up from $1,470 on Friday and $1,380 last Monday. For the month-to-date, rhodium is averaging a nine-month high of $1,416, up from $1,290 in June.
The metal peaked at $9,707/oz last June, after trading above $10,000 during that month, because of a threat of supply disruptions in South Africa, the major producing nation. However, the metal cost an average $993/oz in December 2008 and January 2009 as the recession has depressed car and light truck demand.
A Bloomberg report cites Anglo Platinum, the world's largest producer of platinum group metals, projecting stronger second-half demand for autocatalysts, which will boost platinum, palladium and rhodium prices. Automotive demand for platinum group metals is likely to outpace an increase in car production because inventory levels are low, Anglo Platinum says today in its half-year earnings statement.
However, the latest pickup in rhodium spot pricing is not assured to continue, according to a Reuters report, since new car demand remains weak and is unlikely to gain global momentum until 2010.
"If demand from the consumer does pick up, we could see quite a nice bounce in terms of auto sales, which would feed back into catalysts and rhodium," Tom Kendall, precious metals strategist at Mitsubishi Corp. tells Reuters. "But it is a bit early to see that's what we're seeing yet."
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