Quote from chief_editor on February 26, 2024, 9:04 pm
78 grams of rhodium (Image credit: Alchemist-hp / Creative Commons)
Imagine you are transported hundreds of years into the future. Gold may still hold cultural and historical significance among humanity, but rhodium has become the most prized precious metal on Earth by far in terms of monetary value per ounce. What happened between the 2000s and this futuristic age to make this ultra-rare platinum group metal so staggeringly expensive compared to the more commonly recognized gold?
Our story begins in the early 21st century when the price gap between rhodium and gold began accelerating exponentially to previously unfathomable levels. In the year 2023, an ounce of gold could be purchased for around $1,850 while rhodium changed hands at an astonishing $16,000 per ounce - over eight times higher!
Rhodium’s ascent started with its rarity. Occurring at just 1 part per billion in Earth's crust, it is considered a precious metal behind only iridium in natural scarcity. Gold content meanwhile sat at 4 parts per billion - four times more abundance. Yet gold had been obsessively mined by humanity for thousands of years across every continent, horded by kings and rulers as displays of wealth and power. Rhodium extraction only began in the 1900s, with 90% of mined reserves still sitting unused below ground when major economic forces converged.
By the early 2000s, an upheaval in global emissions regulations drove explosive new industrial demand for rhodium and its chemical cousins platinum and palladium. Their incredible catalytic properties allowed them to enable purification of toxic car and truck exhaust when applied as thin surface coatings on ceramic substrates inside a catalytic converter. As environmental rules phased out dirtier vehicles over two decades, a technological reliance on rhodium took root.
With automobile manufacturers churning out vehicles by the millions in China, India, and Southeast Asia to feed growing urban middle classes, rhodium became intertwined with hopes for clear skies and ice caps preserved. Around 30 grams sprinkled inside a typical catalytic converter started disappearing from global markets annually as fast as mining companies could adjust outputs, driving up bidding from manufacturers. By 2008 Rhodium briefly peaked at over $10,000 per ounce - over ten times higher than gold - before retreating as disruption shook markets.
In the present day of our imagined future centuries hence, rhodium production has long ago plateaued close to its realistic ceiling. Some 80% of the viable underground reserves have been dug up and sold to technologies designed to filter and capture humanity’s pollution like high-tech scrubbers. What little gets recycled often remains trapped servicing bizarre artifacts of the modern fossil fuel age preserved in museums.
With gold used decoratively, artistically and technologically in limited quantities, most sourced gold continues resting in vast underground reserves as extraction costs prove too high. But rhodium’s scarcity, utility, and vanilla investment disinterest creates a chokepoint. The very lack of above-ground holdings also deters speculators from stockpiling assets to flip, further concentrating viable supply for industrial integration. When tiny amounts occasionally trade hands between corporations dealing in pollution remediation technologies of the future, bids reach astronomical levels.
So in this vision of things to come, while gold maintains cultural intrigue and selected practical applications largely capped through stability mechanisms, rhodium’s utter rarity and single-purpose assimilation into high-tech machinery needed for societal functioning makes it Economica Non Grata. Governments suspend free trading of the metal, instead parceling out strategic reserves using complicated rationing protocols, occasionally triggering black markets...
But let’s return to current times! In 2023, the extreme monetary value gap between rhodium and gold persists thanks to a confluence of limited mining capacity, projected increasing catalytic converter demand, difficulty of substitution thanks to chemical uniqueness, stagnant recycling rates, and lack of collective investment interest allowing industrial buyers to dictate pricing. A genuine economic disequilibrium between natural occurrence frequency and application need gives rhodium markets outsized pricing influences for the foreseeable future.
78 grams of rhodium (Image credit: Alchemist-hp / Creative Commons)
Imagine you are transported hundreds of years into the future. Gold may still hold cultural and historical significance among humanity, but rhodium has become the most prized precious metal on Earth by far in terms of monetary value per ounce. What happened between the 2000s and this futuristic age to make this ultra-rare platinum group metal so staggeringly expensive compared to the more commonly recognized gold?
Our story begins in the early 21st century when the price gap between rhodium and gold began accelerating exponentially to previously unfathomable levels. In the year 2023, an ounce of gold could be purchased for around $1,850 while rhodium changed hands at an astonishing $16,000 per ounce - over eight times higher!
Rhodium’s ascent started with its rarity. Occurring at just 1 part per billion in Earth's crust, it is considered a precious metal behind only iridium in natural scarcity. Gold content meanwhile sat at 4 parts per billion - four times more abundance. Yet gold had been obsessively mined by humanity for thousands of years across every continent, horded by kings and rulers as displays of wealth and power. Rhodium extraction only began in the 1900s, with 90% of mined reserves still sitting unused below ground when major economic forces converged.
By the early 2000s, an upheaval in global emissions regulations drove explosive new industrial demand for rhodium and its chemical cousins platinum and palladium. Their incredible catalytic properties allowed them to enable purification of toxic car and truck exhaust when applied as thin surface coatings on ceramic substrates inside a catalytic converter. As environmental rules phased out dirtier vehicles over two decades, a technological reliance on rhodium took root.
With automobile manufacturers churning out vehicles by the millions in China, India, and Southeast Asia to feed growing urban middle classes, rhodium became intertwined with hopes for clear skies and ice caps preserved. Around 30 grams sprinkled inside a typical catalytic converter started disappearing from global markets annually as fast as mining companies could adjust outputs, driving up bidding from manufacturers. By 2008 Rhodium briefly peaked at over $10,000 per ounce - over ten times higher than gold - before retreating as disruption shook markets.
In the present day of our imagined future centuries hence, rhodium production has long ago plateaued close to its realistic ceiling. Some 80% of the viable underground reserves have been dug up and sold to technologies designed to filter and capture humanity’s pollution like high-tech scrubbers. What little gets recycled often remains trapped servicing bizarre artifacts of the modern fossil fuel age preserved in museums.
With gold used decoratively, artistically and technologically in limited quantities, most sourced gold continues resting in vast underground reserves as extraction costs prove too high. But rhodium’s scarcity, utility, and vanilla investment disinterest creates a chokepoint. The very lack of above-ground holdings also deters speculators from stockpiling assets to flip, further concentrating viable supply for industrial integration. When tiny amounts occasionally trade hands between corporations dealing in pollution remediation technologies of the future, bids reach astronomical levels.
So in this vision of things to come, while gold maintains cultural intrigue and selected practical applications largely capped through stability mechanisms, rhodium’s utter rarity and single-purpose assimilation into high-tech machinery needed for societal functioning makes it Economica Non Grata. Governments suspend free trading of the metal, instead parceling out strategic reserves using complicated rationing protocols, occasionally triggering black markets...
But let’s return to current times! In 2023, the extreme monetary value gap between rhodium and gold persists thanks to a confluence of limited mining capacity, projected increasing catalytic converter demand, difficulty of substitution thanks to chemical uniqueness, stagnant recycling rates, and lack of collective investment interest allowing industrial buyers to dictate pricing. A genuine economic disequilibrium between natural occurrence frequency and application need gives rhodium markets outsized pricing influences for the foreseeable future.
