The months of July and August has witnessed a sharp increase in rhodium prices, from a low of around $1,080 an ounce up to nearly $1,300 per troy ounce. The price boom is not coming as a surprise — many analysts predicted that rhodium prices would bottom out late last year, after which industrial users of the metal would buy up supplies while they are cheap. Indeed, 2014 demand for rhodium is expected to exceed supply by around 78,000 ounces, a disparity that will certainly push the price of rhodium higher as the year goes on.
Investor demand for rhodium has also increased as a consequence of the expected price surge. Investors have been buying rhodium bars online in large numbers, taking advantage of the relative low rhodium prices. Despite the increased bullion investment in rhodium, the industrial buying of rhodium is what is really pushing up prices overall.
The boom in rhodium prices could endure for a long time. Goldman Sachs predicts rhodium price increases until 2017, and the Deutsche Bank released a report in January that points out that the demand for rhodium shall exceed the annual supply until at least 2020. Deutsche Bank also predicts that rhodium production in South Africa (which accounts for 80% of the global annual rhodium output) will fall by nearly 6%. A shrinking supply, coupled with increased demand, will assist in pushing rhodium prices even higher.
Rhodium was unheard of to most people until 2008, when the price of rhodium skyrocketed past $10,000 an ounce, up from just $400 an ounce a couple of years earlier. Since that time interest, speculation, and investment in rhodium has greatly increased and the once-unknown metal has become a much more common bullion investment.
Rhodium itself is a silvery-white, lustrous metal of the platinum group series. Rhodium is extremely resistant to chemical attack and corrosion, characteristics which give rhodium its main use: catalyst components in automobile catalytic converters, where around 80% of the annual production of rhodium ends up. Because rhodium reflects up to 85% of light, compared with around 60% for platinum, a thin coating of rhodium is also applied to some jewelry to give the pieces a brighter sheen. Only recently has bullion investment in rhodium appeared on the scene, for many of the same reasons buyers invest in other precious metals: rhodium is very, very rare.
With annual production of rhodium less than 30 tons, rhodium is one of the rarest metals and one of the most expensive. Compare rhodium production to that of platinum, which has yearly production of over 130 tons, yet is currently more expensive than the much rarer rhodium. This scarcity and limited production give rhodium bullion the potential to explode upwards in price. Since the 2008 peak, many investors have been asking: “Where can I buy rhodium bullion?”, and “Does anybody make rhodium bullion products?”. The answer to the latter is now “Yes”.
CBMint has established a relationship with Baird and Company, based in London. The Baird Mint is one of the world’s only producers of rhodium bullion, in the form of high-quality rhodium bars. At CBMint, we have seldom been so enthused to launch a new product series — we have often been asked by our customers when or if we would be able to feature rhodium bullion, and we finally have the opportunity to do so. Browse our rhodium section to take a look at the great rhodium bars the Baird Mint has produced, and enjoy the exciting opportunity to buy rhodium online.