20 November, 2008. EIB Rhodium bullion prices continue to haunt the cold, murky pricing depths of the metals market. Today, Rhodium opened at US$1250/toz. That’s just 12 % of the June ’08 highpoint of US$10,100/toz. 

Rhodium demand is heavily dependent on automotive and industrial catalyst applications. While chemical plants may still be chugging out hydroformylation products at reasonable levels, automobile manufacturers are having a hard time getting citizens to buy new automobiles. And strapped to the undercarriage of each automobile is a metal cannister packed with PGM-laced ceramic material. It is no coincidence that Rhodium prices and automotive sales have collapsed together.

Platinum pricing has fallen considerably as well, from the Feb ’08 high of US$2275/toz to todays opening price of US$780/toz.  While Platinum does have considerable automotive and industrial catalyst application, it is also subject to demand from the global jewelry market, which acts to dampen the price collapse.

Two bits of Platinum news may be strengthening Pt prices. An incident at the Angloplats Polokwane smelter will lead to a shortfall in Pt output by an estimated 200,000 toz.  Johnson Matthey predicted a 240,000 toz Pt shortfall for 2008. It was unclear whether that estimate takes into account the production stoppage at Polokwane. Matthey cited general safety stoppages and skilled labor shortages as being behind the anticipated Platinum shortfall.