Ruthenium is among the rare transition metals that the world uses in many industrial and commercial applications. The annual production is at 12 tons a year while the world reserves are estimated at 5,000 tons – and at this rate, the chemical element is, indeed, as valuable as they come! The applications range from electrical contacts and thick-film resistors as the major uses to chemistry catalyst and platinum alloys as the minor uses, as well as several experimental uses in solar energy production and data storage, among others.
With that being said, the prices of ruthenium as a metal investment have its rise and fall through the years. In the past months from April 2017, the metal’s prices have risen to their highest levels in more than two years. Such increase can be partly attributed to the continued industrial buying coupled with the lack of offers, thus, pushing the bid/ask spread upwards.
Widely Varying Prices
The ruthenium price range increased from $40-$50 per ounce to $50-$60, a significant increase considering the current market. Many market sources even reported bids for as low as $43 while the sales were as high as $68 – and at these rates, the market may not be in a frenzy but it definitely caught the attention of investors. But emphasis must be made that these were only for small volumes, thus, possibly explaining the absence of an investor frenzy.
Most sources, nonetheless, agree that industrial consumers have been buying and buying. This was especially true in East Asia while the Far East market was also in on the act – the process jumped slightly in the area, too. Many market sources placed the physical deals from $50 to $60 per ounce, even $65 overnight, if reports are to be believed.
Even the $65 per ounce price is still in the low range. Many market analysts say that $80 may well be the prices in Asia, which isn’t surprising considering the aggressive need for ruthenium in its multiple markets.
The bottom line: The ruthenium prices varied widely depending on who was talking, as well as on what side of the fence they were straddling. But the fact still remains that ruthenium’s value increased significantly in the past months so there’s finally activity, so to speak, in the market.
Dead for Years
Let’s face it. The ruthenium industry has been dead, in more ways than one, for the past two years. This can be attributed to many factors, such as the sense of complacency that the industrial consumers have likely adopted because of the prices staying so low for so long. The waiting game that the industrial consumers have played in the past years has also contributed to the near-absence of significant activity in the market.
These industrial consumers, according to market analysts, were working down on their physical inventory. But perhaps the inflexion point was already reached wherein the physical inventory has become so low. At this point, people began hoarding ruthenium and, thus, its prices gained momentum. The result: A spread as high as $18 per ounce.
This analysis is further bolstered by the news that a few platinum group metals (PGM) mining companies in South Africa have reported being out of stock of ruthenium for a couple of months. The resulting confusion among industrial buyers contributed to the significant increase in prices and ask/bid spread.
Add the consistent bidding being conducted by the Asian industrial consumers coupled with a few traders increasing their offers and voila! The market is apparently suddenly alive with activity, which can be a boon or a bane depending on your perspective.
Ruthenium’s prices are always volatile for many reasons. This is a rare metal, for one thing, that can only be mined in tiny quantities from platinum ores – or to put it another way, it can only be extracted from platinum ores. The percentage of ruthenium found in platinum ores vary depending on where it was mined, usually 11% from South African mines and a mere 2% from mines in the former USSR.
The concentrated supply coupled with the market’s small size also contributes to its volatile prices. The price swings can then be significant, as is the case in 2017 and in 2008 during the global financial crisis.
The prices for ruthenium are also affected by the prices of rhodium, the sister metal of ruthenium, and platinum. In most cases, the ruthenium prices move with these metals because all of them are mined and produced in similar processes. There’s also the fact that ruthenium and rhodium are used in the transportation industry, especially in cars and airplanes, so its activities also affect the metals’ prices.
If you’re into ruthenium investments, you should strive to be on your toes about the ups and downs of its market. You don’t want to be caught flat-footed while the rest of your fellow investors are raking in the profits. Your sense of vigilance will work to your advantage in many ways.