Coming Soon: Rhodium Bullion Coins

May 20, 2009

Rhodium is a member of the platinum metals group. It is silvery white in appearance and highly reflective. It has been used as a finish for jewelry and mirrors, electric connections in aircraft turbine engines, in catalytic converters of automobiles, and in alloys with platinum and palladium. Rhodium is known as one of the most scarce and expensive precious metals, but there have been few avenues for investing in the rhodium. This will soon change when the world’s first rhodium bullion coin becomes available.

Total rhodium supply for 2008 was a mere 695,000 ounces according to Johnson Matthey. To put this in perspective, for 2008 total platinum supply was 5.97 million ounces and total gold supply was 3,468 tonnes. Two regions account for the majority of all rhodium supply with 82% coming from South Africa and 12% coming from Russia.

Total demand for the rhodium in 2008 was 689,000 ounces. Demand by application was dominated by auto, which accounted for 84%.

Rhodium reached a peak price of $10,010 per ounce in July 2008 before experiencing a precipitous drop which brought the price below $1,000 per ounce. The price of rhodium is now back up to $1,300 per ounce. The incredible price decline for this scarce metal has tantalized bargain hunters, but there have been few options for investing in rhodium. The few options available include pooled accounts or the purchase of scientific element samples. The upcoming rhodium bullion coins will provide an easier alternative, especially for investors.

The Cohen Mint produced the first investment grade .999 fine rhodium coin on April 29, 2009. The coins are expected to be available for sale to the public within the next few weeks. Eitan Cohen, the owner and operator of the Cohen Mint, was kind enough to answer a few questions on rhodium and the new rhodium bullion coins.

How many rhodium bullion coins are being produced and when will they be available?

We have the capability of producing as many coins as there is a demand for. We will be selling the coins individually, and also in wholesale. There will not be any minimum order requirements.

What sizes will the coins be available in? Can you provide an idea of the projected price?

Initially, the Rhodium bullion will come in a 1 gram size. We decided both in terms of pricing as well as recognition, the 1 gram size would be perfect for this new bullion piece. The projected price at current raw material values hovers around $100.00. Now that price not only includes the coin, it includes the sealed plastic coin slab that will securely encase the coin, which is perfect for display as well as protection, a certificate of authenticity with each coin, and free priority shipping to your door.

How long have you been working on perfecting the process of minting coins in rhodium, and how does minting coins in rhodium differ from other metals?

We’ve been working on this for over a year now, its cost us a lot of money as well as time. The work involved in getting this project off the ground has been tremendous, easily the biggest thing our company has ever done. This is really an historic moment, where a truly unique precious metal product comes onto the market, and we’re just excited to be the ones to have pioneered it.

Making coins out of Rhodium has got to be as different from making other kinds of coins as can be. Normally, making coins is a very straightforward process. You roll an ingot out into a sheet, punch blank disks, and then stamp the disks with the design to make coins. This process works with just about any metal you can think of, copper, silver, gold, platinum, palladium, etc. You try and do that with Rhodium and you’ll end up with a bunch of broken flakes and powder. Rhodium has uncommon properties that make it extremely hard, brittle and down right stubborn, features that do not lend themselves to making coins easily.

The way we had to approach it was to come up with a completely new method, a method that was developed through trial and error, through extensive research, and through our own testing here at our facility. After nearly giving up a dozen times, we reached a “eureka” moment a couple of weeks ago, when we realised that we finally cracked the code, and would be able to set up full scale production. Boy, was that exciting.

After rhodium climbed above $10,000 per ounce, the price collapsed below $1,000. Demand continues to be dominated by a single industry. What is your take on the market for rhodium?

There will always be demand for Rhodium, and the price is temporarily depressed due to the terrible state of our economy and the even worse state of all automobile manufacturers. What’s important to keep in mind is that this artificial price dip is not forever, and there will come a point in the near future when people will start demanding cars again, manufacturers will start building them again, and the prices for many commodities will start to rise. Rhodium will be on the vanguard of this revival, and will climb back up to prices that will make us look back longingly at present values.

As the green movement takes a bigger hold on our world, Rhodium’s use in cleaning factory and power plant emissions will grow to be a substantial chunk of global Rhodium usage. Internal combustion engines are not going away any time soon, and of anything, emissions standards are only going to get stricter. This metal, along with platinum and palladium will feel a resurgence once the economy begins to pick back up and consumer confidence reawakens. Now is a great time to buy.

Comments

By Bill Z on May 27th, 2009 at 1:43 am

Very nice article. Part of the reason for asset diversification is an unknown future. The rhodium coins seems like a great place to invest some amount of funds (in the commodity sector) for future price appreciation. Thanks for the info.
Bill

By Paul K. on June 2nd, 2009 at 10:24 pm

Do you use sintering to create a coin from rhodium? I suppose that might be a trade secret. Regardless, is a rhodium coin brittle or subject to cracking should it be dropped or compressed? The technical aspects are truly fascinating. What is the cost above bullion value for such coins? -Thanks, Paul K., PA, USA

By Ngaka on August 7th, 2009 at 5:05 am

Are the rhodium coins available for sale now? How do I buy the coins?

By admin on August 7th, 2009 at 5:40 am

Yes, they are available now. Go to http://rhodiumcoin.com/

By Richard Brodie on August 13th, 2009 at 1:23 am

“What is the cost above bullion value for such coins?”

100 coins (grams) is 3.215 troy oz. At $1,700 per ounce (early August 2009) that’s a bullion value of $5,466. At a price per coin of $89, 100 coins (factoring out the $500 quantity discount) would cost $8,400. That’s a premium of $2,934 or 53.8%

So the price would have to rise from $1,700 to $2,613 in order for such an investment to break even, assuming that a buyer would only be willing to pay the spot price. So if the price were to go back up to $10,000 per ounce you would realize a 383% return, with your $8,400 investment turning into $35,300.

Not bad. Kind of like if silver went from $14 to $54. I’m thinking of getting around 50 grams, but before I cash out silver to buy rhodium, I think I’ll wait for the larger bars which will hopefully not carry quite so high a premium.

Does anyone think that might be a mistake? Have I perhaps made an erroneous assumption that secondary buyers will only be willing to pay the spot price.

By Mike on August 31st, 2009 at 2:00 pm

I think as the price creeps higher, people will be less likely to pay such a high premium. Currently, there is still room to make quite a bit of a profit if rhodium returns to its usual prices. I would get some now, and then wait for larger sizes if you wish. There may never be larger sizes because at 10000 an ounce, the coin will probably cost around 10500. The demand for large coins would be quite low at that point. I wish they sold 1/4 ounces (largest coin that I think people would want if rhodium goes back up).

By Richard Brodie on September 2nd, 2009 at 12:35 pm

Mike,

This is not a one ounce coin. It is only one gram, which equals .03125 troy ounces. So at $10,000 per ounce this coin would be only be worth $312.50

A 1/4 ounce coin would be nearly 8 times the size of this one.

By Steve Trachtenberg on October 9th, 2009 at 9:17 am

Just recieved these great looking coins.Nice Job by Cohen Mint.Encapsulated in hard plastic container.3 1/2 week delivery time.Well worth it.Looking to buy more soon.I read alot of people canceling thier orders because they wait 2-3 havent gotten thier items.So they stop thier payment because he doesnt answer emails.Well I was getting nervous and called him.Mr. Cohen answered the phone(after a few tries) and was very polite and my shipment went out a few days later.If you do order just be patient is my advise.The coins will arrive…

By Steve Davis on April 20th, 2010 at 12:55 pm

It is my understanding the the metal once formed is pretty much useless. It needs to be in a powder form to be useful for industry.

By Ngaka on August 10th, 2011 at 1:17 am

Seeing that the price of platinum and palladium have been rising steadily one would expect that the price of rhodium would also rise. I thought the trio (platinum, palladium and rhodium) fall and rise together. Any reason why the price of rhodium has remained stagnant or rather plummeting.

Leave a Comment