Rhodium climbs 5.4 pct to $1,550/oz
Mon Jul 27, 2009 1:25pm GMT
By Jan Harvey
LONDON (Reuters) - Rhodium prices climbed 5.4 percent on Monday and are up more than 12 percent week-on-week as demand for the white metal used in autocatalysts picked up, with a rise in other precious metals further supporting gains.
Rhodium climbed $80 an ounce to $1,550 an ounce on Monday, up from $1,470 an ounce on Friday. Last Monday the metal was bid at $1,380 an ounce.
Demand for rhodium from the car industry has been so weak in recent months that even relatively small increases in demand are having a noticeable effect on prices.
"There is some demand, mainly from Asian countries," said one London-based metals trader. "Whenever demand comes through, the price goes up immediately. When the car industry comes back, this will have a very big impact on the price."
Buying has lost momentum in recent sessions however, according to dealers, with ongoing weakness in car sales denting interest in autocatalyst materials.
Rhodium rose to a record high above $10,000 an ounce last year, as the threat of supply disruptions in major producer South Africa boosted prices.
However, it quickly plummeted as the recession hit car demand, shedding up to 90 percent of its value. Buying by carmakers is now starting to pick up, dealers said, though with new car demand still weak this is unlikely to gain momentum.
"Rhodium went through a period when we started to see some industrial interest picking up a little, and as that happened the price ticked up along with it," said Tom Kendall, precious metals strategist at Mitsubishi Corp. Continued...
