Rhenium prices have risen sharply over the past four months in response to strong demand, which if sustained could exhaust producers' stocks and drive increased recycling of the metal.
Global rhenium demand is expected to continue to rise in the short term, lifted by strong end-use appetite from aerospace and medical applications. This increasing demand has put pressure on the supply base, causing prices to rise rapidly over the summer. Prices surged sharply across the US, Europe and China between late June and early September, although they have since stabilised.
In the US the monthly Argus assessment for rhenium pellets ended September at $750-800/lb fob warehouse, up by 56pc from the same date a year ago when prices stood at $482-510/lb.
However, consumers currently preparing to renegotiate long-term contracts are much more concerned about availability rather than the underlying spot price. Inventories available for spot consumers are limited, and market participants indicate that the stockpiles held by producers have mostly been depleted.
One of the reasons for the supply squeeze is the steep increase in Chinese rhenium imports in 2023-24. In 2023 alone, China imported over 26t of rhenium from Chile, according to industry estimates — almost a third of the world's annual output of around 70t, including scrap and recycling. The increased imports coincide with the ramp-up in development of China's aviation engine technology, as the country seeks to end its reliance on foreign suppliers for both civil and military aircraft.
Another significant new global driver of rhenium demand is the molybdenum-rhenium (Mo-50Re) alloy, which has the potential to be used in the manufacturing of various medical implants. In August this year, the US Food and Drug Administration (FDA) allowed the use of this alloy in implants, which may replace cobalt-chromium and titanium-based materials. Demand from the medical sector is projected in a range of 10-20t over the next two years, depending on the source.
Demand from the medical sector will potentially increase in China as well, but the extent of China's consumption in this sector remains unclear.
Meanwhile, rhenium orders for catalysts are heard to be rising but the increase is more modest compared with the aerospace and medical sector uptick.
Rhenium supply is inelastic and cannot quickly respond to major changes in demand like those that have occurred in the past two years. The metal is typically extracted as a by-product of copper and, in many cases, a by-product of molybdenum sulphide concentrates. It is not abundant and is both difficult and expensive to extract. Ramping up production in times of high demand is not always an option, and with most of the world's annual output committed to long-term contracts, there is not much material left available for spot sales or last-minute top-ups.
As a result, end consumers, mostly from the aerospace industry are wary about potential deficits, and are seeking extended contracts to secure supplies.
Incentives for recycling
As prices rise, many rhenium buyers are looking at the market for secondary material, creating future opportunities for recycling. "Recycling protects rhenium units when primary supply may be unreliable. It is a natural hedge in a rising market," metals recycler Maritime House director James Peer told Argus.
"With prices beginning to strengthen, recycling will soon become a viable option once again," trading firm Lipmann and Walton managing director Suzannah Lipmann said.
In 2008, Argus prices for minimum 69.4pc grade rhenium APR hit a record high of $10,900/kg duty paid Rotterdam owing to high demand from aerospace and industrial gas turbines, alongside interest in its use in gas-to-liquids technology. These high prices encouraged the extraction of rhenium from nickel alloys and superalloys, increasing supply by over 50pc. However, lower prices over the years have resulted in the closure of several scrap recovery facilities. "Many recyclers exited this very tough market in recent years, when prices dropped below $2,000/kg, but only a handful remain able to restart," Lipmann said.
According to the US Geological Survey (USGS) approximately 25,000kg of secondary rhenium was produced worldwide in 2023.
There is no straightforward substitution for rhenium, which compounds the supply crunch. In rhenium catalysts, a few potential substitutes for rhenium such as gallium, germanium, indium, selenium, silicon, tungsten and vanadium are being evaluated. But in superalloys, the only possibility now is to use less rhenium in the alloys, which is a less efficient production process. Consequently, rhenium prices will need to rise significantly higher before end-users consider switching materials, market participants told Argus.
