Rhodium, a precious metal used to reduce vehicle emissions, rose to a record high of $10,165 an ounce on Friday after a supply squeeze drove prices up more than $4,000 in January alone.
Rhodium is used to cleanse vehicle exhaust fumes of nitrous oxides, and tightening emissions regulations are forcing auto makers to use more of the metal.
Rising demand and an uncertain supply outlook have lifted prices from a low of $615 an ounce in 2016, with the rally going into high gear this month as power shortages in South Africa, where most rhodium is produced, threaten to reduce output.
“Supply is very tight still,” said a trader in London. “$10,000 was a psychological level, and once it got through that it was natural that it was going to carry on.”
Although Chinese markets are closed until next week due to a Lunar New Year holiday and the outbreak of coronavirus, demand is strong from Europe and the United States, the trader said.
“Even if China doesn’t come back in the same full-throttle way it was before, the market still tight enough to move higher.”
(By Peter Hobson; Editing by David Evans)