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Iridium hits all-time high of $4,800/oz on tight supply, 5G tech

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Platts Market Data Metals

Iridium hits all-time high of $4,800/oz on tight supply, 5G tech

Destaques

Iridium price up nearly three-fold since December

COVID-19 severely disrupt S African supply

Key metals tied to green hydrogen economy

London — Iridium base prices maintained their upward momentum March 2 to hit $4,800/oz for the first time ever and as the metal edges toward $5,000/oz on supply tightness, strong demand and the move towards 5G technology.

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The platinum group metal has been on a tear over the past three months, rising nearly threefold since Dec. 18, when stood at $1,760/oz.

The Platts New York Dealer iridium price rose to $4,200-$4,800/oz for the Feb. 19-25 period, from $4,000-$4,750/oz the week prior.

Johnson Matthey -- the largest secondary PGM refiner in the world -- said its iridium base prices stood at $4,800/oz, up 9% on Feb. 23, while refiner Engelhard Materials Services (BASF) of Germany said its price also stood at $4,800/oz, up 1% 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, high-performance spark plugs, medical devices and iridium-coated electrodes for navel ballast systems.

Strong demand, supply disrupted

In recent weeks, market source told S&P Global Platts that the main driver for iridium's price increase has been the crucibles and the need for those to grow the lithium tantalate crystals for 5G technology.

"Until the pandemic struck the iridium market had been a very stable market for many years," trader Karolina Jackiewicz of UK-based minor metals trading company Lipmann Walton & Co. said in an interview.

"The main usage is in the production of crucibles for the SAW [surface acoustic wave] filters for growing of the lithium tantalate crystals for 5G," she said. "This demand will be increasingly important as we move towards 5G and other new technologies."

On the supply side, COVID-19 severely disrupted South African supply in 2020, with Jackiewicz adding that what has changed in the recent period is the demand side.

"Producers thought that they were comfortable with the inventories they had towards the end of last year, but they were caught short," Jackiewicz said.

"We had a situation where a PGM producer was coming into the market in order to purchase material due to their commitments since they didn't have enough material to fulfil those commitments."

Iridium, rhodium and ruthenium are by-products of PGM mining and are produced by a small number of producers. Also known as other precious metals (OPMs), general geological concentration and supply is focused in South Africa, with the country accounting for 81%, 81% and 90% of global mine production respectively.

Though total rhodium primary supply and recycling accounts for around 30 mt of the metal each year, around 7-8 mt of iridium is produced on a yearly basis, with ruthenium, including recycling, around 35-40 mt.

OPMs part of green hydrogen economy

Aside from 5G technology, a number of market sources told Platts that speculators were looking to enter the ruthenium market as the metal had also been linked with the hydrogen economy.

Ruthenium is used to make electrical contacts and computer hard disk drives and is also used as a chemical catalyst.

The Platts New York Dealer price range for ruthenium rose to $320-$340/oz for the Feb. 19-25 period from $310-$340/oz the week prior.

"When talking about the future of both iridium and ruthenium, there is a chance that they are both going to be used in the production of green hydrogen via water electrolysis," Jackiewicz said.

The majority of hydrogen currently produced in the market is made through the methane steam reforming process through which it also generates CO2 as a by-product, Jackiewicz said.

"Looking forward, there is a great deal of potential investment around hydrogen with countries worldwide having their own plan on how to become CO2 neutral," she said. "That technology might help countries towards reaching their [emission] goals in the future. That's why there is a lot of interest from the investors side in iridium and ruthenium."

"Green hydrogen production via water electrolysis with iridium and ruthenium is currently a very small market," she said. "That's something that might become more significant in the long-term, in the next five to 10 years."