LONDON (Reuters) - Prices of precious metal rhodium surged to a record high of $7,050 an ounce on Friday as the market fretted about supplies from South Africa where a power crisis has hit metals production, traders said.

Dealers said rhodium was quoted at $7,000/$7,100 an ounce compared with $6,950/7,000 earlier on Friday and $6,900/6,950 on Thursday. The metal has gained more than 25 percent since January last year.

"The market is already tight, what's happening in South Africa is making a bad situation worse, the market is panicking," a trader said, adding that he had heard some offers at $7,150 an ounce.

Precious metal refiner Johnson Matthey was quoting rhodium at $7,080 at 1528 GMT an ounce on its Reuters page.

South African gold producers and the world's biggest platinum miner suspended production at all their mines in the country on Friday due to a power crisis, helping send precious metal prices to new highs.

The country is the world's biggest producer of rhodium, which is a by-product of platinum.

Most rhodium is used by car makers in catalytic converters to limit carbon emissions, where regulations have become much stricter and contributed to rising demand for the metal.

Rhodium is also increasingly being used by glassmakers to alloy with platinum for use in the production of molten glass, which is extremely corrosive.

During the manufacturing process, the molten glass is fed through a trough that is made out of the alloy, which can stand extreme heat and won't melt.