Key trends in the rhodium market
2020 saw a major increase in rhodium prices although with high volatility: rhodium prices reached
In 2020, the rhodium market remained undersupplied, as the metal’s production decline outpaced growth in demand from the automotive and other industries.
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The automotive industry is the key consumer of rhodium which is used in catalytic converters to detoxify exhaust fumes, thanks to the unique properties of this metal. Installation of such converters on motor vehicles is a legal requirement. Rhodium is considered the best catalyst for nitrogen oxide removal in petrol motors. In 2020, rhodium consumption by the automotive industry decreased by 3.2 t (down 10%) to 27.4 t, mainly due to falling vehicle output amid lockdown restrictions. However, the relaxation of coronavirus restrictions in the second half of the year, fiscal stimuli from most governments and monetary easing led to a recovery in demand. Another growth driver included tougher regulations on pollutant emissions, including the Real Driving Emissions (RDE) test, in effect in the EU as of September 2019. In China, the marked increase of rhodium usage in autocatalysts came in the wake of tougher environmental requirements as part of the China 6 rollout across the country starting from 2019. Tighter Tier 3 and LEV III standards in the USA and declining global share of diesel vehicles (due to their replacement with petrol vehicles) also partly offset the consequences of the decline in vehicle production in 2020 thanks to higher rhodium use per vehicle.
In 2020, rhodium consumption in the glass industry also plunged. Rhodium is used to make crucibles for glass batch melting. In 2020, the industry’s demand for this metal decreased by 0.6 t due to its replacement with cheaper platinum.
Rhodium consumption in the chemical and electronics industries remained flat.
Global production of primary refined rhodium in 2020 decreased by 5 t y-o-y to 20 t. In the reporting period, supply from South Africa, the world’s largest rhodium producer, declined by 5 t due to the nationwide lockdown and operational issues at Anglo American Platinum’s pyrometallurgical facilities. The output of the Russian Federation, North American and other countries remained flat.
Used exhaust gas catalysts are the main source of recycled rhodium. In 2020, recycled output declined by 0.6 t to 10.4 t due to the pandemic restrictions and a drop in new car sales which, in turn, impacted the supply of vehicles for recycling.
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