Emissions parts producer BM Catalysts has warned that the recent rise in prices of precious metals used in vehicle parts is likely to continue.
Over the past two years, precious metal prices have increased significantly. BM noted that Rhodium, one of the most expensive precious metals and one of the rarest elements on earth, began 2020 at just over £4,000 per t oz and at the year end was trading at well over £12,400 per t oz, a 167 percent increase. Rhodium currently trades at around nine times the price of gold. Palladium, also used in catalyst substrate material, finished the year with an increase of 20 percent.
BM puts the recent rise in prices down to emerging and mature markets alike: “The global drive to improve air quality, particularly in areas like China and Europe, has seen demand surge for rhodium and palladium” an article on the firm’s website says. “Furthermore, the move from diesel to petrol trend puts additional pressures on rhodium which is not used in diesel applications”.
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Another reason given for the high price of Rhodium is the tightness of supply. The article says that more than four out of every five ounces of rhodium are mined in South Africa, extracted in minuscule quantities alongside more abundant metals such as platinum, palladium and gold.
“An increased cost of the platinum group metals used in the making of catalytic converters has to be reflected in their sale price – it’s unavoidable” said the article. “The price of the PGMs used can be up to 90 percent of the overall cost of producing a catalytic converter, underlining the fact that the price of parts is dictated almost entirely by the market performance of these metals”.
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