What Is Rhodium & Why Is It The World's Most Expensive Metal?
What Is Rhodium & Why Is It The World's Most Expensive Metal?
Posted on 31/10/2024
Both gold and silver are currently soaring in value, but there's one extraordinarily high-demand metal that outstrips all others in terms of value, and that's Rhodium. This rare, highly reflective, silver-white metal has an incredibly volatile market price owing to global economic and geopolitical factors as well as supply and demand issues in the various industries it's used in. As an investment, rhodium is therefore a much less stable asset than say gold, for example.
Discovered in 1803 by English chemist and physicist, William Hyde Wollaston, rhodium was found along with the similarly rare palladium as a result of an experiment to purify platinum. Wollaston named Rhodium - derived from the Greek word rhodon which means "rose" - after the rosy-red colour of its salt compounds. Along with rhodium, Wollaston also discovered the similarly rare palladium, making him a highly revered figure in the field of chemistry.
Rhodium began trading commercially in the mid-1930s as part of a collaboration between William Hyde Wollaston and fellow chemist Smithson Tennant. The scintillating surface sheen of the metal proved popular with consumers and rhodium became very desirable as an electroplated finish on jewellery, lighters, watches and many other fashion pieces.
Why Is Rhodium The World's Most Expensive Metal?
Rhodium is the most costly metal on earth due to a number of significant industry factors, highly desirable properties and its global availability:
Rarity
The central reason why rhodium is so expensive is due to its scarcity. Only around 30 metric tonnes of rhodium is produced per year compared to the 3,628 metric tonnes of gold produced in 2022. As rhodium is so difficult to mine and extract from the Earth's crust, it's very difficult for the supply of rhodium to meet the demand in the many different industries it's used in.
Supply and demand is the main factor that determines its market value, and therefore, the price of rhodium is extremely unpredictable and sensitive to its global availability as a precious metal. For example, in 2007, the largest global producer of rhodium, South Africa, experienced an electricity shortage which halted the mining process, reducing its available supply and driving up demand. On the other hand, evidence has shown that economic recessions - like the global financial crisis of 2008-2009 - caused the price to drop considerably due to a superfluity of rhodium on the market.
DesirableProperties
Rhodium is known for a number of highly sought-after properties that contribute hugely to its intrinsic value. It's a chemically inert metal that doesn't react with oxygen or corrode, making it ideal for coating items that are exposed to harsh environmental conditions; its impressive electrical conductivity makes it practical for use in high-end electronic components; and it's highly reflective, making it a brilliant and stylish choice for luxurious jewellery and optical equipment. Rhodium is also hypoallergenic, a brilliant catalyst and very resistant to acid exposure.
Versatility & Wide-Ranging Usage
Around 80% of all rhodium is used in the automotive industry to create catalytic converters. It works as a vital component in transforming exhaust fumes into less harmful substances which, in turn, reduces the amount of dangerous pollutants in the atmosphere.
Other uses of rhodium include: the production of glass, mirrors and LCD screens, jewellery making, electrical components in aircraft, cinema projectors, and as a plating or alloy to improve durability and tarnish resistance.