Platinum is widely employed in the health care industry.
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The precious metals market has fluctuated wildly in recent months, as traders bounce between stocks and safe havens. Consequently, gold, silver and other key alloys have been all over the map – except for one.
Rhodium, a relatively obscure precious metal, has garnered intense demand over the last seven months, according to Bloomberg. In fact, prices for the rare substance have increased by almost 50 percent since July 2016, pushing it to new heights. Rhodium is currently going for $920 per Troy ounce and is up 19 percent on the year. Why?
Automakers use the alloy to produce environmentally safe emissions systems. With the rising demand for vehicles, particularly in China, care manufacturers are consuming more rhodium and driving prices upward.
"China is a big part of this story," Jonathan Butler, a precious metals analyst with auto giant Mitsubishi Corporation, told the publication. "The level of car ownership is still growing, and there are signs that it could get to western levels."
This could catalyze a long-term rhodium renaissance and push the metal past other commodities.
"Rhodium is currently going for $920 per Troy ounce."
The role of rhodium
English chemist and physicist William Wollaston discovered the alloy in 1803, according to the Royal Society of Chemistry. Wollaston processed a mixed metal solution containing platinum and palladium and was left with small red crystals made of sodium rhodium chloride. He then isolated the alloy and produced a sample.
Today, metallurgists extract the metal via copper or nickel refinement, as the metal is a by-product of the process. Industrial organizations are its largest consumers, especially automakers, which use rhodium in roughly 80 percent of all catalytic converter assemblies. Jewelers have been known to use it as well, normally coating less valuable items in thin films made of rhodium.
Mines produce an average of 30 tons per year.
Outlook for 2017
Analysts predict the rhodium rush will continue for the foreseeable future but advise caution, as the alloy is prone to volatility due to its scarcity.
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