Rhodium prices surged to $1,500/oz this week as industrial consumers rushed back into the market to take advantage of the rapidly falling prices over the last two weeks.
The Platts New York Dealer rhodium price range jumped to $1,275-$1,500/oz from $1,240-$1,400/oz last week, with some market sources citing deals above $1,500/oz.
"We basically saw the entire market turn, and it wasn't even the beginning of this week." one PGMs refiner said Thursday, who put this week's range at $1,280-$1,500/oz. "We would say it started [last] Friday.
"It was one of those times when on Thursday, we were getting no calls for bids, only offers. Then come Friday, we were getting nothing but bids and the offers had all dried up," the refiner said.
Major European refiners Johnson Matthey of the UK and Engelhard Materials Services (BASF) of Germany posted rhodium base prices of $1,300/oz on November 10.
Those base prices marked a 22% retracement from a six-year high of $1,675/oz reached October 25. Both refiners ended this week at $1,515/oz.
Market sources attributed the retracement to selling by speculative investment funds that had bought before rhodium prices began rising in late September. Rhodium fell below $1,000/oz in May.
"We were getting a lot of cheap stuff because there was still a lot of panic selling [last] Thursday and Friday," said one US PGMs dealer who put the range this week at $1,250-$1,515/oz.
"It was still coming off so hard that people were panic selling," he added, referring to speculative funds and secondary refiners.
But industrial demand remained steady during the selloff, market sources said, citing buying last week by consumers across multiple industrial sectors at $1,300-$1,325/oz.
That buying extended to the current week.
"I think that consolidation to $1,300/oz proved to be the low," a second US PGMs dealer said, putting this week's range at $1,240-$1,490/oz. "A lot of the specs stopped out and made the selloff worse than it should have been, and small buyers came back in, thinking this was a good value."
But buying from a few auto sector consumers accelerated the advance from $1,400/oz to $1,500/oz, according to multiple sources.
"In the $1,300s, there was plenty of industrial demand," said a second PGMs refiner, who put this week's range of deals at $1,275-$1,500/oz.
"But then when it got above $1,400, that's when it dried up and the auto [buyers] accelerated it to $1,500/oz," the source said.
Nearly 75% of global demand for rhodium comes from the auto sector, which uses the metal in catalytic converters to reduce certain greenhouse gas emissions and air pollutants.
But the metal is also used by the glass sector to make reinforcement fiber for digital electronics and by the chemical sector as a catalyst to produce certain chemicals.
