TD Forecasts Rhodium Surplus by 2027 as Autocatalyst Demand Softens – News and Statistics

Sep 25, 2026

According to TD Commodity Strategy, rhodium prices are set to decline as softer demand from autocatalyst producers drives the market into surplus next year. The bank forecasts the metal dropping from around $9,000 per ounce to $7,600 in 2027 and $6,500 in 2028, bringing an end to four straight years of shortfalls.

TD expects a 20,000-ounce surplus next year, which would mark the first such excess since 2022, after a projected deficit of roughly 50,000 ounces this year. The shift might have arrived sooner if output at South Africa’s Amandelbult platinum-group metals mine had not been held back by shaft collapses in 2025.

Limited Stockpiles Leave Market Vulnerable

The bearish longer-term view comes with an important qualification. Above-ground inventories are projected to shrink to barely more than three months of demand, offering scant capacity to cushion an unforeseen interruption at a major mine or refinery.

Rhodium’s lengthy processing timeline amplifies the danger. Transforming material from mine output into refined metal requires over three months, versus just over a month for platinum and palladium, per TD. This bottleneck could trigger abrupt price surges even while the wider market trends toward surplus, since the industry already runs close to full capacity and producers would struggle to swiftly substitute lost supply.

Geographic concentration magnifies the exposure. South Africa provides roughly 85% of global primary rhodium, and just five of its PGM mines generate about half of worldwide output. Smaller South African operations, plus mines in Russia and Zimbabwe, account for most of the rest.

Supply also reacts weakly to its own price since rhodium is mostly extracted as a by-product of platinum and palladium mining. Rhodium makes up only about a quarter of mined PGM revenue, so development and production choices hinge mainly on the economics of the wider PGM basket. This structure means weaker rhodium demand can create a surplus without necessarily prompting miners to quickly reduce output, while supply interruptions can still deliver an outsized impact because inventories provide such a thin cushion.

Autocatalyst Demand Levels Off

Demand poses the more enduring problem. Autocatalysts represent the bulk of rhodium consumption, linking the metal tightly to internal combustion engine vehicle output. Following years of growth, autocatalyst demand has plateaued as electric vehicles capture a bigger portion of the auto market. TD anticipates falling ICE vehicle sales will further drag on rhodium consumption in the years ahead, though slower-than-expected EV uptake should soften that decline in the near term and lower the odds of a drawn-out price slump.

Extended vehicle lifespans also postpone the return of rhodium in older catalytic converters to the recycling market. Secondary supply should nonetheless climb steadily as older vehicles with heavier rhodium loadings reach the end of their useful lives. Elevated metal prices have also spurred more recovery from scrap, though recycling stays limited by imperfect recovery rates and scarce processing equipment in certain vehicle-retirement markets.

Substitution provides another possible release valve, but swapping out rhodium is neither fast nor simple. Palladium is the typical substitute, yet TD reckons implementation can require 18 to 24 months and five to eight times as much palladium as the rhodium being replaced.

Investors, in the meantime, have started coming back to the market. Rhodium exchange-traded funds have posted positive inflows for the first time in over a decade as retail and institutional investors pursue physical precious-metals exposure. Holdings stay far below levels seen in the early 2010s, leaving the market torn between softening structural demand and a supply chain with minimal room for error. The outcome could be weaker prices over the coming years, interrupted by sharp rallies whenever production stumbles.