Australian bushfires raging across New South Wales, ice-cap melt steaming ahead towards rising sea levels, soaring temperatures causing unprecedented drought conditions, and neophyte climate activist Greta Thunberg grabbing headlines.
The plight of a warming planet all appear to be contributing to a surge in demand for rhodium.
The price of the metal, used mainly in the manufacture of catalytic converters intended to curb harmful emissions, has surged 32% since January – its best performance in over a decade.
Said to be driven by spiking demand from Asia’s automotive manufacturing sector, rhodium’s price is expected to sustain its bear-market trend, possibly surging well beyond current levels last recorded as $7.975 per ounce.
It is already outselling gold five times, out-performing and out-pricing its sister metals, palladium and platinum.
Although only making up about 10% of the minerals production for the catalysts market, risk-taking investors are said to be rushing towards rhodium which is unregulated and not exchange traded.
Predictions are that the metal’s price could rally beyond $10.100 per ounce, 2008’s record price when rhodium last saw its biggest play this century.
The good news for South Africa’s mining sector is that 80% of the world’s rhodium is manufactured right here.
Buoyed by an underperforming rand, the price-spiking commodity looks like it’s going to be the biggest investor drawcard for the year’s first quarter.
Unfortunately, production issues, related mainly to Eskom and grid insecurity, could spoil the party. And as has been the case in the past, if miners decide to go on strike in the hope of higher wages, rhodium could see a plunge in fortunes as fast as its meteoric rise over the last two weeks. – Eugene Goddard
