Iridium and Ruthenium: The Minor PGM Market

Key Takeaways

• The iridium ruthenium PGM market is over the counter, priced by refiner benchmarks rather than exchange futures.
• Iridium demand was estimated near 320 thousand ounces in 2021, tiny next to the multi-million-ounce platinum market.
• Hydrogen fuel cells and electrolyzers are a growing source of iridium demand, which adds a new price driver.
• Both metals are thin and illiquid, so prices can gap sharply on small shifts in supply or demand.

What It Is

Iridium and ruthenium are two of the six platinum group metals, mined as byproducts of platinum and palladium, mostly in South Africa. They are often called the minor PGMs because their volumes are far smaller than platinum or palladium. Iridium is used in spark plugs, electronics, crucibles, and increasingly in hydrogen electrolyzers. Ruthenium is used in electronics, hard disk coatings, and chemical catalysts.

Like rhodium, neither metal has a futures contract on COMEX or NYMEX. Pricing comes from refiner benchmarks published by firms such as Johnson Matthey and from dealer quotes.

The Intuition

These markets are tiny, so a modest change in industrial buying can swamp available supply. When several uses grow at once, or when supply is interrupted, the price can climb fast because there is little inventory to cushion the move.

A new structural driver is hydrogen. Iridium is used as a catalyst in proton exchange membrane electrolyzers that split water to make hydrogen. As interest in clean hydrogen grew, investors began pricing in future iridium demand, which adds a forward-looking element to an already thin market.

How the Iridium Ruthenium PGM Market Works

There is no exchange order book for either metal. Trades happen between producers, refiners, industrial users, and dealers, with prices referenced to published benchmarks. Key features:

Pricing:        refiner benchmarks and dealer quotes
Futures:        none on COMEX or NYMEX
Settlement:     physical, over the counter
Supply:         byproduct of South African PGM mining
Iridium uses:   electronics, spark plugs, crucibles, hydrogen electrolyzers
Ruthenium uses: electronics, hard disk coatings, chemical catalysts

Because volumes are small, even one large industrial order can lift the quote. Spreads are wide, and the published price may reflect only occasional trades. This makes timing and execution far harder than in exchange-traded metals.

Worked Example

The 2021 episode shows the dynamic. Ruthenium and iridium, the minor PGMs, posted steep price gains during early 2021. The drivers were robust industrial purchasing, disruptions to South African supply, and rising investor interest in PGM use for hydrogen applications.

Consider the scale. In 2021, iridium demand was estimated near 320 thousand ounces, with about half going to fuel cell and electrochemical uses. By comparison, platinum demand runs in the millions of ounces. A market that small has almost no spare capacity, so when multiple sources of demand rise while South African output is constrained, the quoted price can multiply quickly. The same thinness means prices can fall just as fast when buying pauses.

Common Mistakes

1. Treating them as a single trade. Iridium and ruthenium have different end uses and supply balances. Lumping them together hides which driver is moving which metal.
2. Assuming you can exit easily. These are among the least liquid metal markets. A position that is profitable on paper may be hard to sell without a steep discount.
3. Overweighting the hydrogen story. The hydrogen demand thesis is real but early. Pricing in years of growth that has not yet arrived is a common error.
4. Mistaking benchmark prices for tradeable prices. Published quotes can be stale and indicative. The price you actually transact at may be far worse.
5. Ignoring substitution and thrifting. Industrial users work hard to use less of an expensive metal. High prices invite engineering that erodes future demand.

Frequently Asked Questions

What is the iridium ruthenium PGM market in simple terms? The iridium ruthenium PGM market is where these two minor platinum group metals are traded directly between dealers and users, since neither has a futures exchange. Prices come from refiner benchmarks rather than an open market.

How does the iridium ruthenium PGM market affect investment decisions? Because the market is tiny and illiquid, prices can move sharply on small demand shifts, offering high reward and high risk. Investors usually need physical or specialist access rather than a liquid contract.

What is a real-world example of the iridium ruthenium PGM market? In early 2021, both metals rose steeply on strong industrial buying, constrained South African supply, and growing hydrogen interest, with iridium demand estimated near 320 thousand ounces for the year.

How can investors handle iridium and ruthenium risk effectively? Size positions tiny, treat quotes as indicative, and study each metal's specific demand drivers separately. Expect wide spreads and difficulty exiting in a weak market.

How is the iridium ruthenium PGM market different from platinum futures? Platinum trades as a liquid NYMEX futures contract with daily margin. Iridium and ruthenium have no futures market, trade over the counter, and are far smaller and less liquid.

Sources

1. Johnson Matthey. PGM Market Reports. https://matthey.com/products-and-markets/pgms-and-circularity/pgm-markets/pgm-market-reports
2. Johnson Matthey. PGM Market Data. https://matthey.com/products-and-markets/pgms-and-circularity/pgm-market-data
3. Johnson Matthey. PGM Prices Soar as Demand Recovers Amid Supply Disruption. https://www.prnewswire.com/news-releases/johnson-matthey-pgm-prices-soar-as-demand-recovers-amid-supply-disruption-301291878.html
4. Johnson Matthey. PGM Prices and Trading. https://matthey.com/products-and-markets/pgms-and-circularity/pgm-management

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.