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Heraeus Precious Appraisal

  • Edition 02 - 18. January 2021

Constrained refined output to keep Ir and Ru prices elevated

After months of little to no movement, the iridium and ruthenium prices have rallied over the past four weeks. Iridium reached a new record high of $3,950/oz last week (from $1,750/oz in mid-December), while ruthenium hit $335/oz after holding at $295/oz since June. As off-exchange metals, iridium and ruthenium are less reactive (than platinum and palladium) to sudden changes in the market but an extended period of disruption to either supply or demand will eventually be reflected in the price.

The iridium market is less than a quarter of the size of those of ruthenium or rhodium. The combined impact of a nationwide lockdown in South Africa (which accounts for 80% and 90% of global Ir and Ru supply, respectively) and outages at Anglo American Platinum’s ACP smelting facility last year has led to significant tightness in the smallest PGM markets.

Demand for iridium and ruthenium remained relatively steady through the pandemic and was impacted less than supply. After the lockdown in March/April which had halted all flights, exports of iridium and ruthenium from South Africa jumped. Industrial demand is expected to be strong in 2021 as several end-use sectors return to market growth. Despite recent price rallies, iridium and ruthenium have a lower proportion of price elastic demand than other PGMs, with uses in several processes and components such as chemical catalysts and crucibles where it is difficult to substitute them out, so high prices are likely to be tolerated for longer. Post-pandemic recovery incentives and long-term global decarbonisation targets are also raising the profile of iridium (electrolysers) and ruthenium (fuel cells) in the hydrogen economy.

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