Rhodium prices fell significantly this week on what many sources believe was year-end selling by speculative investors or producers.
That selling had been ongoing, but the US Federal Reserve's decision in mid-week on short-term interest rates may spurred more aggressive offers, according to some trade sources.
The Platts New York Dealer rhodium price range dropped to $610-$700/oz from $680-$720/oz the previous week. Most of the selling occurred early in the week, prompting major European refiners to lower their base prices.
UK refining major Johnson Matthey, which ended the previous week at $700, lowered their base price to $640 by Wednesday, but ended this week at $660.
German refining major Engelhard Materials Services, a division of specialty chemicals maker BASF, lower its base price to $660 by Wednesday from $700, but closed this week at $670.
"Everyone was trying to sell" earlier in the week, said one PGM dealer in the Northeast, putting the range of physical deals at $600-$650/oz.
"Interest is coming back in rhodium at these levels, but everyone was trying to sell ahead of the Fed decision," the dealer said.
A second PGM dealer in the New York area put the week's trading range at $610-$700.
"Someone has been selling, but no one knows exactly who that is," he said. "It could be one of the [exchange-traded funds], but there definitely seems to be some book-squaring going on."
But several trade sources disagreed that the Fed decision had prompted aggressive selling from speculators worried about higher interest rates.
"I don't think it had anything to do with the Fed announcement; it's a different market," one PGM refiner said of rhodium compared with gold.
"We saw a decent amount of industrial activity at these lows," he added, putting the week's range at $610-$700. "These prices haven't been seen in more than 10 years, and people are starting to recognize that fact. We saw a decent amount of demand, but you still have a lot of metal being backed into the market."
A PGM recycler also thought the impending Fed decision had little impact and believed most of the selling had come from producers hoping to reduce their inventory by year-end.
"We heard that there was some late-December producer selling mostly," he said, putting the range of physical deals at $620-$680. "And I don't think it did have much to do with the Fed. I think someone was holding a large chunk of metal at the end of the year, and hoping to do better than average, dumped it."
