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Iridium hits all-time high of $6,000/oz on supply issues, strong demand

Highlights

Iridium base price up 9% week on week

South Africa accounts for 81% of global iridium mine supply

Demand to be boosted by developments in 5G smartphone market

London — Iridium base prices continued to maintain their upward momentum March 19 to hit a new all-time of $6,000/oz on supply tightness from South Africa and strong demand in the electrical and electrochemical sector.

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The platinum group metal (PGM) has been on a tear over the past three months, rising nearly three-and-a-half fold since Dec. 18, when it stood at $1,760/oz.

The Platts New York Dealer iridium price rose to $5,750-$6,150/oz for the March 12-18 period, from $5,000-$5,750/oz the week prior.

Johnson Matthey (JM) – the largest secondary PGM refiner in the world – said in its iridium base prices stood at $6,000/oz, up 9% on March 12, while refiner Engelhard Materials Services (BASF) of Germany also stood at $6,000/oz, up 9% week on week.

Iridium is a critical element in several niche products, including temperature resistant crucibles used to grow synthetic crystals for electronics and telecommunications systems, such as 5G, high-performance spark plugs, medical devices and iridium-coated electrodes for navel ballast systems.

On the supply side, COVID-19 severely disrupted South African supply in 2020. South Africa accounts for 81% of global iridium mine supply. In 2020, 31% of total iridium demand came from the electrical sector, 26% from the electrochemical and 13% from automotive.

Strong demand

Heraeus Precious Metals, one of the world's largest platinum group metals refiners, said in a research note that iridium demand is expected to be boosted further by the development of the 5G smartphone market, with premium products propping up demand for organic light-emitting diode (OLED) displays.

"Costs are declining as more manufacturers release 5G handsets, which will accelerate the rate of adoption," Heraeus said.

"German technology group Merck recently announced a €20 million [$24 million] expansion of its OLED manufacturing capacity at sites in Korea and China to meet growing customer demand in Asia."

Heraeus said OLED technology, which is used in consumer electronics and is built on an iridium compound, was currently the quickest growing display technology.

"OLED screens have many advantages over LED and LCD screens in terms of picture quality and efficiency," Heraeus said.

"Electrical end-uses, including OLED display, accounted for around 70,000 oz of iridium last year, 31% of total demand."

Heraeus said that according to the International Data Corporation (IDC), global smartphone shipments are expected to increase 5.5% year on year in 2021, boosted by a post-COVID recovery in demand and 5G device interest.

"5G is anticipated to be a key driver of growth, boosted by the success of Apple's full iPhone 12 line-up and selected Samsung Galaxy handsets," Heraeus said. "IDC expects 5G smartphone shipments to account for more than 40% of global volume in 2021, growing to 69% in 2025."

Heraeus Precious Metals iridium industrial price stood at $6,600/oz, up 8.2% on March 12.