Supply
Around 80 percent of the primary supply comes from the Bushveld Complex mines in South Africa. There, large PGM producers extract rhodium as a by-product of platinum and palladium ores. Further, albeit significantly smaller, quantities come from nickel operations in Russia, Canada and Finland, as well as from platinum projects in Zimbabwe. As rhodium production is not controlled separately, extraction rates react with a delay to price signals. Power outages, labor disputes and political uncertainties in South Africa regularly pose a supply risk. In addition, the recycling share is growing: more than 25 percent of global demand is now recovered from used catalytic converters.
Demand
The automotive industry dominates rhodium consumption with over 80 percent and is therefore a price setter. In particular, China, the USA, the EU and increasingly India require continuous quantities for gasoline and hybrid vehicles. Further demand arises from the chemical and glass industries, electronics and the jewelry sector, although the latter areas are sensitive to price fluctuations. Regions with high import volumes have only limited resources of their own and are therefore dependent on predictable supply chains. Stricter environmental regulations and increasing hybrid sales speak in the long term for stable to growing demand.