The six Platinum Group Metals (PGMs)—including rhodium (Rh) and platinum (Pt)—are characterized by their rarity, chemical stability, and catalytic properties. The value of rhodium and platinum is linked to their indispensable industrial applications. While both metals are highly valued, their market dynamics and supply constraints result in dramatically different price points. Understanding these differences clarifies why one metal consistently commands a significantly higher market price.
The Direct Answer: Price Comparison
Rhodium is far more expensive than platinum, often by a magnitude of several times. PGM prices are quoted per troy ounce and are extremely volatile, fluctuating daily based on industrial demand and supply chain stability. For context, as of early 2024, platinum traded in the hundreds of dollars per troy ounce, while rhodium was valued in the thousands, sometimes exceeding $15,000 per ounce. Rhodium’s price volatility is far greater than platinum’s; historically, rhodium has soared to nearly $30,000 per ounce, a level platinum has never approached. This disparity highlights that rhodium has lower trading volumes and less market liquidity, making its price hypersensitive to minor shifts in supply or demand.
Factors Driving Rhodium’s Extreme Scarcity and Cost
Rhodium’s extreme price is a function of its supply-side economics and rarity. It is one of the rarest non-radioactive elements, estimated to be about 150 times rarer than gold. Global annual production is remarkably low, with only around 30 tons mined each year.
Rhodium is not mined directly but is recovered as a byproduct of platinum and nickel mining. This means its supply cannot be easily increased in response to rising demand, as production depends entirely on the volume of the primary metals. The supply chain is also highly concentrated, with South Africa accounting for about 60% of global production. This concentration introduces substantial geopolitical and operational risks that can instantly affect global supply and price.
Platinum’s Role as a Dual-Purpose Metal
Platinum, while rare, does not command the same price premium as rhodium because its demand structure is more diversified. Unlike rhodium, which is almost entirely an industrial commodity, platinum serves a dual purpose as both an industrial metal and a store of wealth. Its role in jewelry and investment accounts for a substantial portion of overall demand, often between 23% and 35% of total annual consumption. This diversification acts as a stabilizing force, offering a buffer against volatility in any single industrial sector.
Platinum’s production volume is also significantly higher than rhodium’s, with global output often six to eight times greater, which eases supply constraints. Consequently, its price is influenced by factors like general economic health and gold prices, which affect luxury and investment demand, rather than being solely driven by industrial necessity.
Key Industrial Uses Shaping Demand
Rhodium’s Role in Catalytic Converters
The specific industrial applications of each metal are the ultimate drivers of their distinct market values. Rhodium’s demand is highly inelastic because of its unique and nearly irreplaceable function in automotive catalytic converters. Its primary role is to reduce nitrogen oxides (NOx) into harmless nitrogen and oxygen, a conversion process critical for meeting stringent global emissions standards. Rhodium’s chemical properties make it exceptionally effective for this reduction reaction, and approximately 80% of its total demand comes from this single, mandatory application.
Platinum’s Diverse Industrial Applications
Platinum, in contrast, has a broader range of industrial uses, though it also plays a significant role in catalytic converters, especially for diesel vehicles. Its applications include use as a catalyst in petroleum refining and the chemical industry for producing nitric acid and fertilizer. Platinum is also a core component in the rapidly developing hydrogen economy, serving as a catalyst in both fuel cells and proton exchange membrane electrolyzers. This diversity means that while platinum’s demand is substantial, it is not as acutely dependent on a single, non-substitutable chemical reaction as rhodium’s is.