Rhodium is an irreplaceable material for complying with carbon emission standards in gasoline-powered vehicles, which consume almost all of its annual production. But while global auto sales declined in late 2018 and the first eight months of this year, rhodium spot prices soared to nearly double their 10-year high.
Manufacturing of carbon-emitting vehicles consumes 80% of rhodium production each year due to the metal’s unique ability to convert harmful nitrogen oxide (NOx) in vehicle emissions. Demand from these vehicles — working to comply with stringent emission limits — drive the price of rhodium. The prices are subject to fluctuations during times of even small mismatches between supply and demand, due to rhodium’s small production volumes. (Rhodium is a by-product of palladium and platinum mining.)
Yet, the global downturn in auto sales, paired with the broader economic impacts of the tariff battle between the U.S. and China, have not squashed rhodium spot prices.
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