London — Rhodium, the rarest of the platinum group metals (PGMs), is undergoing a significant market recalibration. After tightening to a 50,000-ounce deficit in 2025 — the widest shortfall in years — the market is expected to swing into a 15,000-ounce surplus in 2026, according to Johnson Matthey's latest PGM Market Report.
The shift marks a decisive inflection point for a metal that has seen extreme price volatility, including a 49.6% rally between December and March 2026 that drove prices to multi-month highs above $11,500/oz, followed by a softening to $9,650/oz by late May.
Johnson Matthey attributes the surplus to a confluence of factors: declining global internal combustion engine (ICE) vehicle production, metal thrifting by automakers, and a meaningful recovery in autocatalyst recycling that has been slow to rebound since the 2023–24 downturn. Primary supply from South Africa, which accounts for roughly 80% of global rhodium output, continues to contract due to mine rationalization and closures, but secondary supply growth is now outpacing the decline in mining.
Rhodium's price trajectory over the past 18 months has been extraordinary. The metal surged from approximately $6,500/oz in 2023 to multi-year highs above $11,500/oz in early 2026, before settling around $9,650/oz in late May. The December-to-March rally alone delivered a 49.6% gain, driven by acute supply tightness and robust demand from catalytic converter manufacturers responding to tightening global NOx emission standards.
However, the momentum has faded. Since April, rhodium has shed roughly 11% of its value, with ChAI's forecast model pointing to further downside to approximately $9,675/oz. Heraeus Precious Metals projects that PGM prices will "reset" lower in the first half of 2026, with rhodium's surplus weighing on sentiment.
Metals Focus, in its May 2026 PGM market report, struck a more bullish note — forecasting rhodium prices to rise 62% for the full year 2026 — but noted that the metal had already retreated from early-2026 highs as a gold-led rally faded and geopolitical tensions weighed on investment sentiment.
The recovery in autocatalyst recycling is a pivotal variable. Recycling already supplies an estimated 20–25% of global rhodium, and Johnson Matthey expects double-digit growth in secondary supplies this year as spent catalytic converter collections normalize after several years of disruption. The increasing efficiency of recovery technologies and the buildout of specialized recycling infrastructure are structural trends that could keep the market in surplus beyond 2026.
"Autocatalyst recycling has been slow to recover from a downturn during 2023/24, while primary supply from South Africa and North America has been eroded by rationalization and mine closures," Johnson Matthey noted. "But that dynamic is reversing."
With the market flipping to surplus, the consensus among analysts leans toward range-bound or mildly lower pricing through the remainder of 2026. Plisio's forecast sees rhodium trading in an $8,000–$9,500/oz band if ICE vehicle production remains steady, while ChAI's model points to a near-term price of approximately $9,675/oz — a level that has already been reached.
The critical variable remains automotive demand. With over 80% of rhodium consumption tied to three-way catalytic converters, any acceleration in BEV adoption or further declines in ICE vehicle output could widen the surplus faster than anticipated. Conversely, any supply disruption in South Africa — whether from mine closures, labor action, or energy shortages — could rapidly erase the surplus and reignite price spikes in a market as thin and opaque as rhodium's.
• Rhodium spot price (May 22, 2026): $9,650/oz, down 4.9% month-on-month
• 2025 deficit: 50,000 oz (Johnson Matthey)
• 2026 estimated surplus: 15,000 oz (Johnson Matthey)
• Dec 2025–Mar 2026 rally: +49.6% (IMARC)
• Year-on-year price change: +81.2% (TradingEconomics)
• Percentage of demand from autocatalysts: ~80%
RZZRO Market News is for informational purposes only and does not constitute investment advice. Data sourced from publicly available reports and market data providers. Always conduct your own due diligence.