Beyond gold, beyond silver or even platinum, there is a precious metal more rare, much more valuable, and certainly more desired than any other. That metals’ name is Rhodium.
Rhodium is a bright, silvery hard metal that is part of the platinum group of metals. These are six metals normally found together in nature that share physical and chemical properties with each other. They are: Platinum, Palladium, Rhodium, Ruthenium, Iridium and Osmium. Rhodium has a very high melting point (3567 F), over 350 degrees higher than platinum. That, together with its hardness and brittle nature makes manufacturing with pure Rhodium extremely difficult. Normally when used in wires, catalysts, thermocouples or other specialized hardware, it is alloyed with other metals, most often platinum. It is rare to find it in its pure form.
Rhodium is a material of extreme importance in our world. Without Rhodium, we wouldn’t have automobiles today as we know it. The pharmaceutical industry relies heavily on Rhodium to catalyze many of its most important reactions to create the life sustaining drugs so many of us rely on. Those along with several other industrial needs place Rhodium right in the center of some of the most economically important human activities around the globe.
What makes Rhodium so special is that it’s extremely rare. While annual gold production tends to be over 2500 metric tons (that’s over 80 million troy ounces of brand new gold taken out of the ground each year), annual production of Rhodium amounts to less than 25 metric tons, less than 1 percent that of gold! Even platinum, which itself is rare and usually significantly more expensive than gold, is mined at a rate ten times greater than Rhodium, at approximately 230 metric tons annually. Demand for Rhodium is approximately 25 – 26 tons annually, which means there is no slack between what is produced and what is used up. Exactly all the rhodium being mined gets immediately used, and if there is ever any drop in production, like there was in 2008, the price tends to spike sharply.
In 2008, mine production of Rhodium dipped from 25 tons the year before (2007) to 22 tons (2008), a loss of only 3 tons. If we were talking about gold, or even platinum, that wouldn’t even be a blip on the radar. But because Rhodium is so rare, and demand is so strong, 2008’s deficit of 3 tons caused a sharp tightening of supply and a corresponding surge in price, culminating in Rhodium’s all time market high of over $10,000 a troy ounce.
With the inevitable and unstoppable rise in economic power of huge nations such as China, India, Brazil and many others, industrial production of automobiles in those countries, among other activities will only put more strain on the already stretched supply of this valuable metal. There is absolutely no indication that mankind’s need for Rhodium is decreasing. In fact, the opposite is true. As emerging markets begin to demand the same luxuries that we in rich countries have enjoyed for decades, the need for hundreds of millions of brand new automobiles will likely overwhelm the fragile and tiny world supply of Rhodium. Already the United States has lost its place as the number one manufacturer of cars. America didn’t stop making cars, its just that other countries overseas are simply making more, many millions more. As billions of people in developing nations begin to demand modern medicines that they’ve never had access to in the past, pharmaceutical use of rhodium to catalyze chemical reactions will increase. Other industrial demands on the small global supply of rhodium will likely only increase as well.
As investors, people who learn about Rhodium understand its crucial importance in today’s and tomorrow’s world economy. Here on this blog I will do my best to educate you about this remarkable metal. I will bring you the latest information, fascinating analysis, weekly news digests and price forecasts. Always remember that the price of Rhodium tends to be very volatile, and like all investments there is a risk of loss. This blog is not meant to be financial advice, and you should carefully consider your own unique financial situation before buying rhodium (or anything for that matter).
