Rhodium market hits 20-month high on Amplats’ interest

London — Rhodium prices have leapt to the highest in 20 months as buying interest from Anglo American Platinum (Amplats) coincided with strong demand and lower first-quarter output in SA, two sources familiar with the matter said.

Though it is normal for any large miner to seek to buy as well as to sell on the spot market, bidding in recent weeks by Amplats unnerved some consumers who had anticipated prices would fall.

The world’s third-largest rhodium producer after Impala Platinum and Sibanye-Stillwater had sought to buy or borrow the metal, the sources said on condition of anonymity.

Amplats “is a regular buyer and seller of PGMs [platinum group metals] in the ordinary course of business and regularly sources metal from the markets to meet customer needs and manage price risk”, a company spokesperson said.

Prices for rhodium, mainly used by vehicle makers in vehicle exhaust systems to neutralise harmful emissions, have risen 20% so far this month.

They broke above a psychological level of $5,000/oz on Thursday and reached $6,040 on Tuesday, the highest since June 2023, before retreating to $5,640 on Wednesday.

In a previous spike in 2021, the price hit a record $29,890/oz on strong demand and production outages, and analysts say volatility is to be expected in thinly traded markets such as rhodium.

Amplats, which is due to demerge from Anglo American by June and seek a separate listing in London, did not specify how much metal it sought from the market.

It said market sentiment had strengthened because of expected demand from China, strong car sales in the US and the EU’s easing of CO₂ emission rules.

Flooding in some parts of SA in late February prompted Amplats to temporarily halt operations at its Tumela mine, accounting for 10% of the group’s output, though the company was able to maintain its 2025 forecast for metal-in-concentrate production.

Two-year depression

The price jump when rhodium’s sister metals — platinum and palladium — have been largely flat is positive for miners hit by two years of depressed prices for platinum group metals, due to bets that growth in electric vehicles (EVs) would curb future demand.

“There has been stronger-than-expected end-user demand as well as a consistent bid in the market over the past two weeks,” said Tai Wong, an independent metals trader.

SA supplies 80% of mined rhodium output with the rest coming from Russia, Canada or the recycling sector. Miners usually sell 80%-90% of their production under long-term contracts and the balance on the spot market.

A source at another miner, who declined to be identified, said the firm was receiving requests for metal to sell on the spot market but could not meet them because it had agreed contracts to sell most of its rhodium.

The source said the additional demands were mostly from North American automakers and Chinese glass manufacturers.

Wilma Swarts, director of PGMs at consultancy Metals Focus, said the increased activity was the result of short-term supply constraints and was unlikely to last.

“While the price could go higher, it should be short-lived,” she said, adding that softness was expected longer term due to rise in PGMs-free battery EVs.

According to Metals Focus, the deficit in the global rhodium market is expected to narrow this year to 74,000oz from 143,000oz in 2024 with demand falling by 8% to 1-million ounces and supply declining by 2% to 951,000oz.

Above-ground stocks are seen declining to 612,000oz.

Reuters