Rhodium deficit set to “to again” in 2022 as automakers accelerate production says Amplats

THE deficit in the rhodium price which has seen the metal cruise to an all-time record level of about $30,000 per ounce this year would resume in 2022, said Anglo American Platinum (Amplats) CFO, Craig Miller.

The rhodium market was expected to “move into balance” owing to a shortage in the supply of semiconductors that forced automakers to reduce car production by about four million units.

However, the recovery of the industry would see this year’s deficit “… go again in 2022 as the automotive industry picks up,” said Miller.

Commenting on the platinum price – which recovered to a six year high price of around $1,300/oz during the first six months of this year – Miller said it would continue to be used as a substitution for palladium which would move into balance.

Palladium could potentially be used by automakers as a partial substitution for rhodium in gasoline autocatalysts but not significantly enough to address the general shortage of rhodium supply, he said.

Amplats is heading for extremely strong full year results to end December after it reported record interim numbers today.

Headline earnings of R46.4bn were nearly six times higher than the R6.7bn unveiled at the interim stage last year. It gave Amplats the confidence to pay out 100% of earnings to shareholders. The dividend consists of an R70 per share dividend – in terms of the firm’s policy to pay 40% of headline earnings topped up with an R105 special dividend.

Amplats’ financial performance was also heavily influenced by a significant improvement in production, in particular refined output which was 128% higher year-on-year at some 2.33 million ounces. This represents a strong recovery following the commissioning of the firm’s Anglo Converter Plant (ACP) in the second half of 2020.

The rhodium and platinum prices surged to all time highs of $30,000/oz and $3,000/oz respectively during the six month period. Platinum achieved a six year high of above $1,300/oz. The minor PGMs, iridium and ruthenium, also made positive contributions as strong industrial demand took iridium to an all-time high of $6,300/oz and ruthenium to a 14-year high of $800/oz, said Amplats.

“The fundamentals of our PGMs and base metals remain robust,” said Natascha Viljoen CEO of Amplats. “Overall, we achieved strong earnings, we have a strong balance sheet with net cash of R57.6bn and increased our return on capital employed to 207%.”