The prevailing market sentiment for both rhodium and ruthenium is one of renewed optimism, marking a distinct "revival" in their respective markets. This positive momentum stands in contrast to the broader platinum group metals (PGM) complex, where palladium prices are experiencing downward pressure, and platinum, despite being in a deficit, sees its price gains dampened by substantial above-ground stocks.
The outperformance of rhodium and ruthenium compared to other PGMs suggests a decoupling of these "minor" PGMs from the general market trends. This divergence stems from their unique demand profiles and specific supply constraints. Rhodium's rebound is fundamentally linked to a resurgence in demand from the glass and chemical sectors, which are now finding the metal more attractive at its lower price levels, combined with an inherently tight supply. For ruthenium, the dramatic price increase is a direct consequence of escalating demand from the electronics industry, particularly for advanced data storage and semiconductor applications, alongside its emerging role in the hydrogen economy. The limited production capacity and rising consumption are driving bullish forecasts for ruthenium's future. This indicates that market participants should analyze rhodium and ruthenium distinctly from the broader PGM complex, as their price dynamics are increasingly influenced by specialized industrial applications and the acute sensitivity of their concentrated supply chains.
The "revival" in both markets is a direct result of genuine consumption growth and a tightening of the supply chain, as opposed to speculative activity. Inventory drawdowns have been a defining feature, with Rhodium stocks now at their lowest levels in over four decades.
The price movements of both rhodium and ruthenium highlight their susceptibility to extreme deviations from historical averages. For rhodium, the current price range of approximately $7,500-$8,288 per troy ounce is significantly below its 2021 peak of nearly $30,000 per troy ounce but substantially higher than its mid-2016 low of around $600 per troy ounce. Compared to its price on January 1, 2018, of approximately $1,881 per troy ounce, the current levels represent a considerable appreciation. The market has shown periods where prices were multiple standard deviations from their long-term means, particularly during the 2021 surge and subsequent crash. While precise z-scores would require more granular historical data than available, the magnitude of these swings clearly indicates extreme market conditions.
For ruthenium, the current price of approximately $850-$961 per troy ounce is near its 2021 peak of $800 per troy ounce and its 2007 peak of $870 per troy ounce. It stands considerably higher than its January 1, 2018, price of approximately $219 per troy ounce. The price volatility observed for both metals, particularly the extreme spikes and subsequent corrections, is an inherent characteristic of their markets. This is primarily due to their concentrated supply chains, specialized demand, and relatively thin trading volumes. This means that even during a period of market revival, sharp corrections or further surges remain distinct possibilities, necessitating dynamic risk management strategies for all market participants.
The extreme price spikes for rhodium and ruthenium in 2021, far exceeding those of platinum and palladium, underscore their inherent vulnerability as "minor" PGMs. Their supply is dominated by South Africa, and they involve technically complex refining processes with long lead times. This makes them exceptionally sensitive to single-point-of-failure supply disruptions, such as the Anglo American Platinum converter plant outage, which can lead to acute liquidity squeezes and exaggerated price movements compared to their more diversified PGM counterparts. The current revival could similarly be amplified by any new supply constraints, reinforcing the need for careful monitoring of their unique market dynamics.
Rhodium’s demand is primarily driven by the automotive industry, where it plays an essential role as a non-substitutable catalyst for reducing nitrogen oxides (NOx) emissions in gasoline engines. Stricter global emissions regulations are a significant factor behind the increasing need for rhodium. For instance, the recent implementation of China's stringent China 6b (VIb) standards in July 2023 has mandated lower emissions and incorporated real-driving emission (RDE) testing, resulting in a rise in rhodium requirements per vehicle. While there has been some softening regarding the Euro 7 regulations, their eventual implementation, along with US Tier 3 standards, continues to exert pressure for high-performing catalysts, ensuring sustained demand for rhodium.
In terms of substitution dynamics, although efforts have been made to explore alternatives such as palladium (Pd) and platinum (Pt), rhodium's unique catalytic properties for NOx reduction make it difficult to replace, particularly in such stringent regulatory environments.
On the other hand, ruthenium's demand profile is more diversified, with its revival stemming from two distinct sectors. The electronics and semiconductor industries are now the primary growth drivers for ruthenium, as its unique properties are leveraged in advanced semiconductor manufacturing. Specifically, ruthenium is utilized as a diffusion barrier and a copper seed layer, which facilitates the production of smaller and more efficient chips. Additionally, there has been a renewed demand for hard disk drives (HDDs) due to large-scale data center expansions, with ruthenium playing a key role in the magnetic layers of platters.
Moreover, as the hydrogen economy continues to grow, ruthenium's future appears promising. It serves as a crucial catalyst in Proton Exchange Membrane (PEM) electrolyzers, which produce green hydrogen from water, making it a significant driver in numerous green hydrogen projects. Additionally, ruthenium dioxide (RuO₂) is employed as a dimensionally stable anode in various electrochemical processes, solidifying its vital role in the transition towards clean energy.
The revival of rhodium and ruthenium is fundamentally a supply-constrained story, particularly given that both metals are primarily by-products of platinum and palladium mining, mainly concentrated in South Africa. This country accounts for over 80% of the global mine supply of rhodium and ruthenium, creating a significant risk due to this lack of diversification.
Production in South Africa has faced consistent challenges. One major issue has been load shedding, where power outages from the state utility, Eskom, have intermittently halted mining activities. Additionally, operational restructuring has posed problems as labor disputes and safety concerns have led to mine closures, resulting in lower output. This situation has also prompted a shift to different ore bodies that have varying profiles of platinum group metals (PGMs).
Another crucial source of supply comes from recycling autocatalyst scrap, yet this flow has significantly declined. In 2024, it is estimated that the total recycled supply of rhodium fell by over 15%. Several factors contributed to this decline, including longer vehicle ownership cycles and decreased scrap availability, a situation exacerbated by the impacts of the pandemic.
The PGM supply chain faces a variety of challenges stemming from geopolitical and environmental, social, and governance (ESG) risks. One significant issue arises from geopolitical tensions, particularly concerning Russia, the world's second-largest producer of PGMs. Following international sanctions, the flow of PGMs from Russia has been redirected, primarily towards new markets like China. This shift has introduced a host of logistical and pricing complexities that complicate the supply chain further.
In addition to geopolitical challenges, PGM miners in South Africa are increasingly under pressure from investors to enhance their ESG performance. Key areas of concern include carbon emissions across all scopes, water stewardship, and the safety of labor practices. Furthermore, the hydrogen value chain, which relies on ruthenium, is also coming under scrutiny, with Life Cycle Assessments being conducted to evaluate its overall environmental impact. These ESG pressures highlight the urgent need for improvements in sustainability within the PGM mining sector.
The revival in the rhodium and ruthenium markets is not a fleeting phenomenon but rather the start of a new, fundamentally driven growth cycle. It is a story of supply constraints meeting genuine, accelerating demand from sectors critical to the global economy and energy transition. The market is increasingly vulnerable to supply shocks, and the value of efficient, integrated PGM refining and recycling has never been more apparent.
For organizations seeking faster assay turnaround, transparent settlements, and flexible hedging on PGM scrap (including ruthenium and rhodium), Phoenix Refining offers integrated recycling and refining solutions with enterprise-grade reporting and logistics support. Contact Phoenix Refining to optimize your PGM recovery and risk management.