A surge of speculative buyers followed by a wave of price-sensitive industrial consumers propelled rhodium prices higher this week.
The Platts New York Dealer rhodium price rose to $700-$770/oz from $680-$720/oz last week.
Some brokers even put the high end of the range at $775, citing the base prices of German refining major Engelhard Materials Services (BASF).
Engelhard lifted its rhodium base price to $800 by the end of the week, from $730 a week earlier. UK refining major Johnson Matthey raised its base price to $780 by Friday from $715 at the end of last week.
Nearly all sources contacted by S&P Global Platts Thursday said the buying began Monday with speculative investors. "We did see some metal changing hands through a broker," one PGM dealer said, putting the week's range at $690-$770.
"A lot of people had the view that this was some [speculative] guys getting in, and the people who were short got scared and bought it up," the dealer added.
By the end of Tuesday, European refiner prices had risen to $750, forcing more industrial consumers into the market.
The rapid price increase "probably got some of the industrial guys a little spooked," one PGMs refiner/recycler said, putting this week's range at $700-$775.
"They didn't want to miss the bottom too much and so they came in and bought what they needed. There wasn't a huge amount of business going on, but for rhodium, it was something," he said.
A second PGMs refiner/recycler who put rhodium in the $680-$770 range said: "I will say that the run-up did prompt some complacent industrial buyers to jump in, which added to the momentum as well."
A European dealer agreed this week's rally was largely speculator driven, but questioned whether rhodium could move much higher on speculative buying alone.
"The speculative interest needs industrial interest with it. As soon as the spec interest pulls away, the market stagnates or comes down," he said, putting this week's range of deals between $690 and $765.
"What I want to see is for industrial interest to come in to justify the high price because this has moved pretty quickly," he said. "I would be surprised if the industrials at these levels were willing to buy big clips."
Like platinum and palladium, rhodium is used in automobile catalytic converters to capture greenhouse gas emissions.
But rhodium is far more dependent on automotive demand than are the other two metals, which have other retail and industrial consumer applications.
