Rhodium: The $28,000 Metal You’ve Never Heard Of - And Why It Matters
world-today-news.com – November 8, 2023 - While gold grabs headlines, a far rarer and more valuable precious metal quietly powers critical industries worldwide. Rhodium, currently priced at up too $28,000 per ounce – over 15 times the value of gold - remains largely unknown to the average investor, despite its indispensable role in modern life.
Rarity and Demand Drive Sky-High Prices
The unusual price of rhodium is a direct result of its extreme scarcity coupled with robust industrial demand. Found in the Earth’s crust at a concentration of just 0.000037 parts per million, rhodium is exceptionally tough to mine.To put that into perspective,you’d need to sift through 5 billion grams of the Earth’s crust to find a single gram of this silver-white metal. Platinum, already considered rare, is found 25 times more frequently.
Unlike platinum or palladium, rhodium isn’t typically a primary mining product. Rather, it’s recovered as a by-product of platinum, palladium, and nickel extraction. Currently, South Africa dominates global rhodium production, accounting for over 85% of the world’s supply, with Russia as the second largest producer.
This limited and often unpredictable supply chain makes the rhodium market particularly volatile. Disruptions in mining operations for other precious metals, combined with geopolitical factors in key producing nations like South Africa and Russia, can cause prices to surge dramatically.
The Automotive Industry: Rhodium’s Biggest Consumer
The vast majority – 80-90% - of global rhodium demand comes from the automotive industry. Rhodium is a crucial component in catalytic converters, proving remarkably effective at reducing harmful nitrogen oxides (NOx) in exhaust emissions.
The use of rhodium in catalytic converters dates back to 1976, when Volvo pioneered the technology. While platinum and palladium were initially used, engineers quickly discovered rhodium’s superior performance in controlling emissions.
As environmental regulations tighten globally and commitments to agreements like the Paris Agreement strengthen,the demand for rhodium is poised to continue its upward trajectory. Every vehicle with an internal combustion engine relies on a catalytic converter, making rhodium an essential element for the automotive industry. This demand, though, also contributes to the high cost of catalytic converters and, unluckily, makes them a target for theft.
Beyond Automobiles: Diverse and Critical Applications
While the automotive industry is the primary driver of demand, rhodium plays vital roles in other sectors:
* Nuclear Energy: Rhodium is used to detect neutron streams in nuclear reactors, a critical safety function.
* Chemical Industry: It serves as a catalyst in the production of nitric and acetic acid, valued for its ability to withstand extremely high temperatures.This also makes it ideal for precise measurements in scientific research.
* Jewelry: Rhodium is often used as a protective coating for jewelry, enhancing its durability and shine.
Looking Ahead
Rhodium’s unique properties and limited supply ensure its continued importance in a variety of industries. while its price volatility presents challenges, the growing focus on environmental sustainability and the ongoing need for its specialized applications suggest that this $28,000 metal will remain a critical – and frequently enough overlooked – component of the modern world.
Learn More: What is Rhodium, more than 5 times more expensive than gold?
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