The SA Reserve Bank’s (Sarb’s) Quarterly Bulletin is generally backward looking, but it still contains some gems. 

One that emerged from its most recent one unveiled on Tuesday for Q2 involved rhodium, part of the platinum group metals (PGMs).  

“Rhodium accounted for 53% of total PGM exports in the second quarter of 2021, which was mainly destined for the US and the United Kingdom (UK),” Sarb said.  

This is pretty astonishing when one considers that rhodium accounts for only about 7% of PGM production in South Africa. 

Rhodium is a key ingredient in the emissions-capping catalysts used for petrol engines, and earlier this year available supplies were woefully short to meet demand that was going through the roof as the auto sector geared up for the global economic rebound from the pandemic-triggered meltdown in 2020.  

Rhodium’s price in late March reached almost $30,000 an ounce, a record high which made it probably the most valuable precious metal in history. Four years before, it had been fetching less than $1,000 an ounce, according to data compiled by Johnson Matthey, a catalyst maker.  

This is why, despite only comprising about 7% of the PGMs mined here in terms of production ounces, rhodium accounted for 53% of PGM exports in Q2. It certainly has been punching above its weight, and its price has played a significant role in the record surplus on the current account of balance of payments and trade surpluses that South Africa posted in the quarter. 

This also explains why the rand was punching above its weight until its recent downturn.  

But rhodium’s rave is now fading into a more subdued kind of party. 

Its price is now around $14,500 an ounce, a little less than half of its record peaks. This is because of a short-circuit in global supply chains, which has resulted in a shortage of the semiconductor chips used in auto production. Less car-making means less demand for rhodium and other PGMs. 

Once those supply problems get rectified, demand may well roar back, and rhodium will be in the spotlights of the rave once again. In the meantime, Q3’s trade data will almost certainly be much more subdued. And the economy is also widely expected to contract this quarter, which ends at midnight on Thursday. Talk about a hangover. DM/BM