(Bloomberg) — Palladium’s great start to the year pales in comparison to its lesser known, but much more expensive sister metal, rhodium.
Rhodium — mainly used in autocatalysts and five times more costly than gold — surged 32% already this month, touching the highest since 2008. Stricter emissions rules have fueled a multiyear rally and there’s speculation that investors are also jumping in, betting that prices will climb toward a record.
Rhodium rallied 12-fold in the past four years, far outperforming all major commodities, on rising demand from the auto sector. Like palladium, the metal is mined as a byproduct of platinum and nickel, but it is a much smaller market and so is liable to big price moves when supply or demand changes.
“Rhodium is subject to crazy volatility,” said Anton Berlin, head of analysis and market development at Russia’s MMC Norilsk Nickel PJSC, which mines about 10% of all rhodium. Supplies are tight and speculators stepped up buying metal after large industrial users secured volumes late last year, he said.
Rhodium was at $7,975 an ounce by Monday, according to Johnson Matthey Plc. This month’s gain also came after investors turned to precious metals, seeking a haven from Middle East tensions and pushing palladium up almost 10%.
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