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May 23, 2006

Don’t These People Have Editors?

Ouch. Really, ouch. Someone needs to have a little word in the shell like of Ambrose Evans-Pritchard.

Rhodium has risen more than tenfold since early 2004, driven by demand for catalysts, plasma LCD screens and missile technology.

Mebbe.

"These metals cannot be invested in, but prices are being driven higher by the same structural changes in fundamental demand as copper, increasingly classed as a speculative bubble."

Tungsten, used in drills and light bulbs, is up 330pc; while iridium has soared 328pc on its use in compasses and pen tips. Molybdenum is up eightfold; ruthenium fivefold; both cadmium and antimony have more than tripled.

Again, mebbe. What most of these (except for Mo and W ) have in common is that they are by products of other mining processes. No one opens a mine just to produce cadmium (although I think North Korea has one, an exception), so if demand changes it’s very difficult to increase supply. Because there is no necessity for the base material to also have risen in demand. So traders in these markets are used to wild swings in prices over the years. Indium goes up and down like a yoyo on a 5 year or so cycle, tantalum for all those capacitors in mobile phones around 2000/2001.

You can actually invest in them but only by purchasing and then storing physical stock which is what I think they mean, that you can’t have futures or options.

Refiner Johnson Matthey said demand for the metal had raced ahead of supply in 2005.

"With demand for rhodium growing by more than twice the rate of increase in supplies, the market moved to a deficit of 58,000 ounces," it said.

That’ll be off the back of catalytic convertors, the things on cars. Petrol engines use a Pt/Pd/Rh mix in them. Might only be a gramme per car but you can see that rising car sales will lead to a rise in demand. This is actually something of a step change, for while they can be (and are...worth seeing if you can collect a few hundred such cats from cars. I know the guy at Johnson Matthey you can sell them to) recycled, the older cars on the roads still don’t have the newer type. So we’re seeing one end of the cycle, the new materials, filling up with these metals, and they’re not yet coming out of the other end in the same quantities. But they will and we’d expect to see more balance in the market. (That 58,000 ounces is perhaps 2 million car’s worth of pgms)

However:

China has become a major importer of rhodium, partly for use in catalysts to convert crude oil into petrol at its new generation of high-tech refineries. It is also used as a fission product absorber in nuclear energy.

Really? News to me. Rhodium in nuclear power? No idea what he’s talking about there. Hafnium perhaps, but I don’t see why that should be confused with rhodium.

The oil refinery catalysts? Unless something very major has changed in the past few years that would be rhenium/platinum catalysts,  not rhodium/platinum. Re/Pt, not Rh/Pt.

Tsk, Tsk.

May 23, 2006 in Telegraph Watch. | Permalink

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Comments

And to think people call you a pedant. That's Rhenium not Rhonium you fools!

Perhaps you should submit this to Private Eye?

Posted by: Luis Enrique | May 23, 2006 9:22:48 AM

You couldn't be more right, Tim. Speaking as a platinum miner I must say that I'd love to be able to cut back on Osmium and Palladium production and focus on the other PGE's just at the moment. Sadly our deposit has a pretty much fixed split amongst the six metals: one ounce of Pt will always give us one ounce of Pd and a little bit of all the others whether we want them or not.

The only alternatives open to producers like us is to take the ruling price or stockpile "unwanted metal" in the hope of better prices in the future. Of course if follow the latter course we get accused of hoarding and profiteering by the economic know nothings even if stockpiling is the best option for our shareholders.

All we can do is hope some clever scientist, beavering away in his lab can find a way to substitute palladium for platinum in some of the processes that are currently the exclusive preserve of Pt.

For anyone wishing to earn this miner's undying thanks, diesel autocatalysts would be a good place to start. Give us a palladium one of those and I'll personally nominate you for a nobel prize. Come up with a good working PGE fuel cell and our MD will probably bequeth you his children.

RM

Tim adds: Nooooo! We don’t want pgm fuel cells at all! Scandia stabilised zirconia please!

Posted by: The Remittance Man | May 23, 2006 9:49:59 AM

2005 did see the introduction of diesel-engined catalysts using palladium, though at present the amount and proportion is small.

I think the increase in rhodium usage in 2005 was less an increase in car sales and more tougher emissions standards, which tend to favour a heavier rhodium mix. The catalysts he means are not in oil but in the chemicals industry.

Posted by: Matthew | May 23, 2006 9:59:38 AM

Pah! Scandium.

Use PGEs, you know it's the right thing to do.

RM

Posted by: The Remittance Man | May 23, 2006 12:23:27 PM

D'you think Luis Enrique is serious? That it's pedantry to differentiate between two elements? Sometimes you have to despise the liberal arts.

Posted by: dave heasman | May 23, 2006 5:00:37 PM

Dave,

I guess you'd have to ask the man operating the nitro-glycerine mixing machine that one.

RM

Posted by: The Remittance Man | May 24, 2006 7:59:46 PM