CPM GROUP RHODIUM MARKET OUTLOOK
CPM G
ROUP
Rhodium Market Outlook
A comprehensive study of the global rhodium market including projections
through 2018 of rhodium supply by mine, demand by end-use, and prices.
FOR INTERNAL CORPORATE USE ONLY.
NOT FOR REPRODUCTION, DISTRIBUTION, OR RETRANSMISSION OUTSIDE OF CPM CLIENT COMPANY WITHOUT WRITTEN CPM GROUP CONSENT.
CPM Group 30 Broad Street 37th Floor New York, NY 10004 USA Telephone: 212-785-8320 Telefax: 212-785-8325 E-mail: [email protected] Website:http://www.cpmgroup.com
Author: Rohit Savant
Jeffrey M. Christian, Managing Director
Doug Sherrod, Managing Director, Investment Banking Alec Kushnir, Director, Investment Banking
Mark Hansen, Director of Price Risk Management Adam J. Crown, Executive Vice President
Nichola Eliovits, Associate
Carlos Sanchez, Associate Director, Research Catherine Virga, Senior Research Analyst Rohit Savant, Senior Research Analyst Douglas Horn, Research Analyst Chintan Parikh, Research Analyst Jenee Peele, Administrator Madhusudan Daga, Consultant Bhargava Vaidya, Consultant
2009
The information contained here has been obtained from sources we believe to be reliable. We believe this information to be reliable, but do not guarantee its accuracy or completeness. Opinions expressed here represent those of CPM Group at the time of publication. This material is for private use of sub-scribers. CPM Group is not soliciting any action based on it. Information contained here should not be relied on as specific investment or market timing advice. At times the principals and associates of CPM Group may have long or short positions in some of the markets mentioned here.
CPM GROUP RHODIUM MARKET OUTLOOK
Executive Summary
Chart: The Monthly Average Metals Week New York Dealer Price of Rhodium
Price Forecast
Base Case Scenario……….12 Supply Forecasting Methodology and Assumptions………...12 Demand Forecasting Methodology and Assumptions……….…15
Chart: Base Case: Rhodium Supply and Demand
Fundamentals Supportive of Price Outlook……….17
Chart: Base Case: Real and Nominal Rhodium Prices Chart: Base Case: Rhodium Surplus and Deficit
Table: Base Case: World Rhodium Supply and Demand Balance Table: Base Case: Rhodium Supply, Demand, and Price
Economic Overview
The Current Economic Cycle and Longer-Term Economic Trends.. ... 26
Chart: Relation Between Global Vehicle Sales and Global Gross Domestic Product Chart: U.S. Unemployment Rate
Chart: OECD Unemployment Rate
Chart: U.S. Personal Savings as Percentage of Disposable Personal Income Chart: Bank Credit of All U.S. Commercial Banks
Chart: Real Gross Domestic Product projected through 2014 Chart: Total Loans and Leases - U.S. Commercial Banks Chart: Vehicles Per Thousand People as of 2007
Supply
Rhodium Supply Overview... 32
Chart: Total Rhodium Supply (1976 — 2018p) Map: World Rhodium Mine Production
Focus on Rhodium Supply in South Africa……….…….… 34
Mining in South Africa
Table: Planned Capacity Expansion at Eskom (2009 — 2017) Chart: Number of Fatalities in South African Mining Industry Mining the Upper Group 2 (UG2) Ore Body
Table: Average Grades of Precious Metals in the Merensky, UG2, and Platreef Ores of South Africa Chart: South African PGM Production Indexed to 100
Table: Percentage of Tonnes Mined from UG2 Reef
South African Rand and U.S. Dollar Exchange Rate Chart: Exchange Rate: South African Rand/ U.S. Dollar Effect of Recession on South African Mining
Table: Typical Time Line for Platinum Group Metal Projects Mine Production
Table: South African Rhodium Mine Production, Projected Through 2018
Focus on Rhodium Supply in Russia ………46
Table: Russia Norilsk: Estimated Composition of Platinum Group Metals Ores Table: Russian Rhodium Production and Exports, Projected Through 2018 Mining in Russia
Focus on Rhodium Supply in Canada……….…………..49
Secondary Supply
Focus on Rhodium Secondary Supply ………..50
Effect of Global Economic Slowdown on Secondary Recovery of Rhodium Chart: Rhodium Secondary Supply and Price
The Effect of Scrappage Schemes and Other Incentives
Table: Vehicle Scrappage Schemes in Europe and the United States Stricter Emissions Standards and Median Age
Thrifting of the Metal in Event of Record High Price Typical Flow of Scrapped Vehicles in Developed Countries Demand
Rhodium Fabrication Demand Overview……….53
Chart: Annual Rhodium Demand (1976 — 2018p) Chart: World Rhodium Use Per Capita
Rhodium Demand in Automotive Catalysts……….56
Rhodium: An Integral Component of Auto Catalysts Chart: Rhodium Demand in Auto Catalysts (1976 — 2018p) Vehicle Sales
Chart: Global Vehicle Sales (1999 — 2018p)
Chart: Vehicle Sales in N. America, Europe, & Japan (1999 — 2018p) Chart: Vehicle Sales in BRICs (1999 — 2018p)
CPM GROUP RHODIUM MARKET OUTLOOK
Trends in the US Auto Market………..61
Global Leader No More
Chart: Vehicle Sales in the United States (1999 — 2018p) Chart: Monthly Vehicle Sales in the United States
Trending Toward Smaller Vehicles Hybrid Vehicles
Chart: Hybrid Vehicle Sales (2004 — 2018p)
Chart: Market Share of Hybrid Vehicle (2004 — 2018p)
Trends in the BRIC Auto Market……….65
China
Chart: Vehicle Sales in China (1999 — 2018p) Chart: Monthly Vehicle Sales in China
Rising Demand for Large Cars Chart: Annual SUV sales in China
Chart: Market Share of SUVs in Chinese Auto Market Brazil
Chart: Vehicle Sales in Brazil (1999 — 2018p) Flex Fuel Vehicles
Chart: Flex Fuel Vehicle Sales in Brazil India
Chart: Vehicle Sales in India (1999 — 2018p) Tata Nano
Russia
Chart: Vehicle Sales in Russia (1999 — 2018p)
Trends in the European Auto Market………..73
Chart: Vehicle Sales in Europe (1999 — 2018p) Central & East European Countries
Scrappage Schemes Smaller Engine Sizes
Chart: Average Engine Size of Newly Registered Vehicle in Europe
Trends in the Japanese Auto Market………76
Chart: Vehicle Sales in Japan (1999 — 2018p)
Chart: European Gasoline Passenger Vehicle Emissions Standards Table: Implementation of Emission Standards in Major Vehicle Markets
Other End-Uses………80
Chart: Rhodium Demand in Electronics (1976 — 2018p) Chart: Rhodium Demand in Glass (1976 — 2018p)
Chart: Rhodium Demand in Chemical Catalysts (1976 — 2018p) Rhodium Demand in Other Smaller Applications
Potential Threats to Rhodium Demand………...84
Nano Technology Electric Vehicles Other Threats
Investment Demand & Consumer Inventories……….86
Price Forecasts
Alternate Scenarios ………87 High Case Scenario ……….…...90
Fundamentals Supportive of Price Outlook
Chart: High Case: Real and Nominal Rhodium Prices Chart: High Case: Rhodium Supply and Demand Chart: High Case: Rhodium Surplus and Deficit
Table: High Case: World Rhodium Supply and Demand Balance Table: High Case: Rhodium Supply, Demand, and Price
Low Case Scenario ………99
Fundamentals Supportive of Price Outlook
Chart: Low Case: Real and Nominal Rhodium Prices Chart: Low Case: Rhodium Supply and Demand Chart: Low Case: Rhodium Surplus and Deficit
Table: Low Case: World Rhodium Supply and Demand Balance Table: Low Case: Rhodium Supply, Demand, and Price
CPM GROUP RHODIUM MARKET OUTLOOK
Select Data Sources:
A-1 Specialized Services and Supplies, ANFAVEA, Association for Emissions Control by Catalyst (AECC), Association of European Business (AEB), Automotive News,
![Outlook and appraisal [June 2014]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACH5BAEAAAAALAAAAAABAAEAAAICRAEAOw==)