Rhodium

(This product is not offered for sale. For information purposes only.)

Rhodium, the rarest of all precious metals. Like palladium, it is a member of the platinum group metals (PGM). It is frequently used to harden alloys of platinum and palladium. Rhodium is a key component in the worlds’ automobile industry. Rhodium investors have seen the metal’s price increase rapidly during the last five years. But, with a soaring price comes the worry that the bubble may, and did, eventually burst.

Rhodiums’ principal uses are as a finish for jewelry and mirrors, and in electrical connections . Also in aircraft turbine engines. It is also frequently used in catalytic converters in automobiles with internal combustion engines, which help to curb emissions. Lastly, rhodium can be considered the ultimate symbol of wealth above and beyond gold or platinum, because of its price and rarity.

Rhodium doesn’t come cheap by any means. It’s price has been rising steadily since 2003. Rhodium has averaged a price of  $3,225 dollars per ounce for the past few years, climbing higher than $9,000 dollars per ounce between January and April of 2008. This year rhodium is selling under $3,500 dollars per ounce, making it a very interesting investment. The only thing holding down the price currently is the economy. It will get better! And as it does, rhodium prices will skyrocket once again.

Rhodium price increases have been because of its use in catalytic converters, where, especially in diesel-powered vehicles, the metal has no substitute. Rhodium is expected to keep outpacing other precious metals in price as its need in diesel and non-diesel catalytic converters continues. According to the International Herald Tribune Europe, in particular, has a high demand for rhodium as 60 percent of all its’ automobiles are diesel-powered.

Rhodium supplies have been reduced because of the continued power outages in South Africa, driving up the metal’s prices for several years. With demand heavily outweighing supply, South African mining companies were still forced to slow and sometimes even halt rhodium output, because of lack of electrical power. The crisis is expected to continue through 2013.

Rhodium cost increases will continue to reflect world supply shortages. These increases will be felt in the automobile market, potentially driving up the price of catalytic converters. Also in other markets that use rhodium as well. Before investing in rhodium, people should take into account that the skyrocketing price of the metal could eventually come crashing down. Although supply shortages have contributed to rhodium price increases, so have the massive consumption and demand by the U.S. automobile industry, which uses more than half the world’s annual world supply of rhodium. Automobile industries, especially in places such as China and India, are beginning to play a huge role in rhodium consumption also.

Rhodium demand worldwide, at least for now, remains robust as automobile industries continue to heavily demand the precious metal. Rhodium has seen several drops in its price recently, but continued supply shortages in South Africa will continue to drive the price up a long as demand remains strong and the economy continues to recover.