Market opinion is split as to whether a surge in rhenium prices over the past two weeks is being driven by short-term private investor speculation or a structural demand shift in a growing industry.
Speculation rarely takes hold in niche, minor metal markets like rhenium. Most of these metals do not trade on exchanges and purchasing is predominantly through term contracts, supplemented by small spot volumes, with fundamentals the key driver.
The fact rhenium is the by-product of a by-product — it comes from molybdenum, which comes from copper — means supply is not always flexible enough to accommodate investor appetite or even prompt consumer top-up spot purchases. The metal is not abundant — global supply is about 65t, rising to about 85t when stockpile sales and recycling are taken into account — and it is difficult and expensive to extract.
So when Chinese buyers began making urgent inquiries two weeks ago, it surprised some traders — and the unexpected demand meant prices began to rise in China and on western markets.
In Europe, catalyst-grade ammonium perrhenate (APR) prices were assessed at $2,300–2,400/kg duty paid Rotterdam on 22 July, up from $1,800–2,000/kg at the start of July.
In China, Argus-assessed prices for 69.4pc APR had risen to Yn9,000-11,000/kg ex-works on July 22, up from Yn8,000-10,000/kg on 15 July, and 17pc up from 1 July.
The initial increase was driven by private investor interest in the metal. All of a sudden, rhenium was considered a ‘safe haven' for middle-class investors in China.
This mirrors recent investment in platinum group metals (PGMs) fuelled by industrial uses and shifting investor sentiment.
"Some investors that profited by purchasing platinum at higher prices last month are now shifting their focus to the rhenium market, hoping for similar gains," a producer told Argus.
Direct investment in rhenium coins and pellets is gaining traction alongside its use in precious metal jewelry alloys.
The surge of interest from private investors ebbed this week, leaving the rhenium industry's traditional players uncertain as to what caused this spike and what it means for price direction going forward.
"Because of the rise of PGMs, some people think rhenium is the next best thing," a trader in Europe told Argus. "But this market is not suited for speculation.
"We've heard this before, and others in the west got burned in the past… That's why there is not that much speculation here."
For some, the latest increase signals a structural market change.
"The rhenium industry has experienced a significant shift due to increased demand. This is driven by a highly dynamic aeronautical industry, as well as new applications in medical implants and defence," a producer told Argus.
Other market sources concurred. "We see the latest spike very well supported by fundamentals, not just speculation," a broker said.
Demand rises for new applications
Global rhenium demand has risen notably over the last year. China has been hoovering up much of the global supply of rhenium, which is primarily produced by Chile, for its burgeoning aerospace manufacturing industry. China leapfrogged the US as the largest importer of rhenium from Chile in 2023, taking 26t — up from 2t in 2018 — according to UK-based trading firm Lipmann Walton. That was equivalent to the annual primary production of main global supplier Molymet. The US has historically been the largest importer for its aerospace industry, with aerospace super-alloys typically accounting for around 75pc of overall rhenium demand.
Rhenium demand is also being boosted by US president Donald Trump's pro-oil stance and his cuts to tax credits for renewable energy. Rhenium is a key input for petroleum-reforming catalysts.
Additionally, on the global stage aerospace will increasingly need to compete with the medical industry for rhenium. Rhenium-based alloys continue to find new uses as an alternative to the stainless steel, titanium, nickel-titanium and cobalt-chromium alloys used in medical implants. Although this has not disrupted the market yet, it could cause further headaches for established consumers in the future.
Global rhenium product price increases have now slowed. In China, some producers are not offering and are taking a 'wait and see' approach, Argus has heard. There is still room for gains, market sources said, but not at the pace seen this month.
The surge may be over, but the rhenium supply-demand picture is imbalanced, so spikes of the kind seen this month might not be one-offs. The fact there is no straightforward substitution for rhenium exacerbates the crunch, and this surge is arguably another wake-up call to the fragility of metal supply chains — this time illustrated by a small, but strategic market.
