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PGMs: The exciting bunch

06 march 2023

I'm sure you've heard it: platinum is on the agenda with projected market deficit in 2023 and an anticipated rise in its industrial consumption in a long run. And although palladium's performance may be lackluster, it is still a major trade commodity. However, the scope of platinum group metals (PGMs) lies beyond those two stellar members of the family.

Among the four 'ugly ducklings' are rhodium, osmium, ruthenium and iridium, and if you look closely, they may actually appear to be beautiful little swans, and very rare ones at that. The market share and volume of these elements may comprise just a fraction of that of palladium alone, but it is nigh impossible to substitute them for anything else. Moreover, to get your hands on these four PGMs, in most cases you have to turn to producers directly which means that usually, only industrial buyers and professional investors remain primary consumers.

That said, not all PGMs are created equal. Some are critical for various hi-tech industries, while others have seen virtually no price fluctuations or new uses for decades. Still, PGMs are quite exciting to look into in terms of their varying applications and recent market dynamics. We will briefly touch upon platinum and palladium markets and focus more on those PGMs that are not a usual focus of attention for investors. But first, let us assess the current state of PGM markets.


Brief market overview

Prices of most PGMs are closely tied to both technological advancements and environmental policy regulations. Platinum, palladium and rhodium are extensively used in automotive industry for catalytic converters to a varying degree of emissions reduction efficiency, with rhodium being the best. However, prices usually dictate how much of each metal is used for such applications, and this is where rhodium which costs around $12 000 per troy ounce loses to both platinum and palladium which cost about $1000 per ounce and $1650 per ounce respectively. Automotive sector accounts for 41% of platinum demand, 81% of palladium consumption, and 85% of rhodium usage which puts it as a major driver for markets of all three metals.

The other three PGMs have more specific applications. Ruthenium, currently priced at around $465 per ounce, is used primarily in electronics as plating for contacts and in smelting as a component of some specific alloys. Iridium is a more expensive element priced at around $4600 per ounce, used primarily in temperature resistant crucibles to grow synthetic crystals. Iridium and ruthenium are used together in several industrial chemical processes, including the manufacture of acetic acid, a key intermediate in the manufacture of other bulk chemicals. Lastly, osmium, the rarest of the bunch, has not found many new markets over the past few decades which is why its price has remained relatively stable at around $60 000 per ounce. The cost of osmium has attracted the attention of forward-thinking individuals who are actively trying to establish a new and unexpected market for this metal.


Production and geopolitics

Since PGMs have a critical importance for a variety of industries, it is of utmost concern to ensure a constant supply, especially for countries like USA, China and Germany due to their sizeable manufacturing sectors.

For example, the Critical Minerals Institute is an organization that was founded for education, collaboration, and to provide professional opportunities to meet the critical minerals supply chain challenges in America, Canada, Australia, Britain and Europe. Just recently it posted a list of 14 critical minerals identified by the United States Geological Survey as "critical to the U.S. economy and national security after an extensive multi-agency assessment". These critical minerals are required not just for battery materials and electric vehicles, but also for future green technologies and energy production, and PGMs are a part of this list along with rare-earth elements and others.

Focus on PGMs is not surprising considering the fact that there are only a handful of producers in the world. South Africa is in the lead in terms of all six PGMs production with a global share of more than 60% and the country is estimated to hold up to 90% of world reserves of these elements. The second largest is Russia, a major producer of palladium (around 40% of the world's supply), platinum (10%), and rhodium (7%). Each year, around 180 tonnes of platinum, 198 tonnes of palladium, 35 tonnes of ruthenium, 30 tonnes of rhodium, 3 tonnes of iridium and 1 tonne of osmium are produced worldwide.

PGMs are usually mined as a concentrate which is then broken into individual elements. For example, Anglo American produces a 5E+gold (five elements and gold) concentrate comprising platinum, palladium, rhodium, ruthenium and iridium, and gold. Sibanye-Stillwater produces 4E concentrate (platinum, palladium, rhodium and gold) at its South African operations. Rarer PGMs are critically dependent of platinum and palladium mining as they are mostly obtained as by-products at concentrate refineries.

In March 2022, a rally in PGM markets was attributed to Russian military action against Ukraine. Investors feared that new sanctions could be put in place, effectively severing Russian PGM supply from the world market. Last year, power outages in South Africa have put a noticeable pressure on PGM mine production in the country. Since this limited supply can be easily jeopardized, it is no wonder that major manufacturing powers want to secure reserves of rare PGMs – especially in the wake of green energy transition. According to a recent study by the WPIC, China has been buying sizeable quantities of platinum over the course of 2022, and I suspect that similar picture is true for other PGMs. China has got big reserves of rare-earth elements but does not have PGMs. It needs both to get an edge in a highly competitive hi-tech manufacturing market. And PGMs are the future of hi-tech industry with each element having its own unique applications.


Platinum, palladium and rhodium

The biggest trio of PGMs is undoubtedly platinum, palladium and rhodium, all used extensively in automotive industry for catalytic converters. However, there are other applications for these elements, namely, electrochemical industry, jewellery and glassmaking.

Apart from an extensive usage in jewellery sector (30% of total demand), platinum is a prime metal to empower green energy transition and hydrogen economy because it is used in both production and consumption of hydrogen in fuel cells. It is an important sector of growth but even trade bodies acknowledge that hydrogen energy is only one of the facets of the future green economy. Hydrogen can be stored relatively easily, it can be transported and used to mitigate grid deficits while taking advantage of excess energy production. This is a long-term game for platinum, as hydrogen power will require big investment and a lot of time to implement.

At the same time, total historic PGM autocatalyst demand growth is well above global auto sales growth due to progressively higher loadings, in other words the quantity of metal used in an emissions control system. As long as conventional vehicles sales remain strong and eco legislation continues to tighten, the PGM autocatalyst demand is going to increase.

Source: OICA, LMC Automotive, Johnson Matthey

The only real threat to this demand is electric vehicles sector, projected to reach $846.70 billion by 2027, a significant share of the global automotive sales. Although quantities vary by model, on average, one standard catalytic converter contains about 3-7 grams of platinum, 2-7 grams of palladium, and 1-2 grams rhodium, while an electric battery-powered vehicle may contain only a fraction of these metals, mostly used for plating microchips and contacts. As for fuel-cell electric vehicles, it is unlikely that they will play a significant role in a foreseeable future. This is especially bad news for palladium with autocatalyst demand comprising more than 80% of this sizeable market. With EV proliferation, palladium market may face a significant squeeze long-term.

All three metals are extensively used in both chemical and glassmaking sectors. For example, platinum-based catalysts are key to many large-scale industrial chemical processes. They ensure high-quality production with fewer by-products and more efficient use of input raw materials, frequently along with lower energy use in the process. Rhodium is used to catalyse a variety of chemical processes, including globally important chemicals such as nitric acid and acetic acid, which are precursors to a range of end-products. In glass industry, high temperature stability and oxidation resistance under harsh conditions make platinum, palladium and rhodium the ideal candidates for crucibles and molten glass mixers to achieve high purity. Since fiber optics require high quality, low-impurity glass, the proliferation of 5G networks may lead to increased demand for these PGMs.



There has been a substantial growth in global ruthenium demand within the electrical sector for data storage. Ruthenium, along with platinum, forms part of the magnetic layer in hard disk drives. Chip resistors, another near-ubiquitous component in consumer and industrial electronics, rely on ruthenium-containing compounds, and this sector is becoming increasingly important for ruthenium demand. The unique chemical and physical properties of ruthenium mean that it is also utilised in numerous semiconductor materials and components, which enable increasing miniaturisation and efficiency in various electronic devices.

Single-crystal jet turbine blades. Source: American Scientist

Ruthenium is seldom alloyed with metals outside the platinum group, where small quantities improve some properties. One prime example is advanced high-temperature single-crystal superalloys for power systems, next generation jet engines and high performance space rockets. When jet engine blades are cast as a single crystal part from a superalloy, they can withstand temperatures close to melting point for prolonged periods of time without creep or degradation. Addition of ruthenium to superalloys has shown improvement in mechanical properties by an order of magnitude.

Some ruthenium complexes absorb light throughout the visible spectrum and are being actively researched for solar energy technologies. For example, ruthenium-based compounds have been used for light absorption in dye-sensitized solar cells, a promising new low-cost solar cell system.



Iridium is the most corrosion resistant of all PGMs and it is critical for several niche products, including temperature resistant crucibles used to grow synthetic crystals for electronics and telecommunications systems, such as 5G, high-performance spark plugs and medical devices.

Only non-alloyed, very pure materials such as platinum, iridium, gold and rhenium can be used for growing single crystals from oxide melts. The melting temperature, the atmosphere and the constituents of the melt determine the choice of material. For this reason iridium crucibles are used at temperatures up to approximately 2300° C for growing crystals of high melting oxides (e.g. sapphire, spinell) for laser technology and the optical industry. Synthetic sapphires are getting more acceptance for high-end electronic devices and watches. Similar method is used to produce OLED displays for modern smartphones. OLED technology, which is used in consumer electronics and is built on an iridium compound, was currently the quickest growing display technology. According to Heraeus Precious Metals, electrical end-uses, including OLED display, accounted for around 70 000 ounces of iridium in 2020, 31% of total demand.

Grown sapphire. Source: Gemological Institute of America

Automotive sector plays an important role for iridium market, too, accounting for about 13% of total demand. Iridium tips optimize the performance of automotive spark plugs to improve the efficiency of the combustion process in gasoline engines due to the high temperature stability of the metal.



Osmium is the densest of all the naturally occurring non-radioactive elements and the hardest of all PGMs, possessing a high abrasion resistance which led to its use in everyday objects such as fountain and ball pen nibs, styluses, record player needles, instrument pivots and electrical contacts where friction needs to be minimized. Due to osmium's hardness and brittleness it is extremely difficult to work with and it is usually produced in a powdered form. When oxidized, it emits a toxic osmium tetroxide used in the detection of fingerprints and in staining biological samples before they’re inspected under a microscope.

With this, osmium would not be very exciting in terms of its applications if not for a certain recent development. The price of the metal has been stagnating for decades due to the fact that the demand and supply matches up and doesn’t fluctuate – until recently.

The new development came in 2013 when scientists in Switzerland found a way to crystallize osmium, rendering it non-toxic and available for both collectors and jewelers. Osmium crystals are forged into discs of varying sizes and then cut into different shapes to be used in jewellery pieces. Since then, an Osmium World Council was created in Germany with a goal to proliferate the knowledge about the metal and create a whole new market.

Ring featuring 'Osmium Diamonds'. Source: osmium-jewelry.com

Since osmium is rare and only a small amount is produced each year as a by-product of platinum mining, the new trade body for the metal decided to market the new product by comparing it to another rare luxury – diamonds, of course. And naturally, the strategy of cannibalizing the diamond market is in place. For example, one of the products is called 'Osmium Diamonds' which is a small disc of crystallized osmium of 6-8mm in diameter. According to the Osmium World Council's web shop (sic!), they "sparkle even more beautifully than diamonds" which is of course subjective but then it reads that "Osmium Diamonds are much more impressive in terms of surface area than the small standard diamonds in 3 mm size". The FAQ section of their website goes on to talk about how rare and beautiful osmium is compared to how common and worthless diamonds are. Truth be told, this is just marketing for potential buyers and I don't see osmium taking over any significant share from the diamond market.

Theodor Lisovoy for Rough&Polished