Ultra-rare metal rides AI boom as commodities star performer
Ruthenium, a silvery grey mineral, has eclipsed the headline-grabbing rallies in other commodities such as gold and silver by nearly doubling in price over the past year to US$800 an ounce, according to metals refiner Johnson Matthey. That matches its peak in 2021 and is not far off the all-time high of US$870 hit 18 years ago.
The platinum group metal is prized for its exceptional hardness, and versatility across electronics, energy storage, and chemicals manufacturing. But it's the AI revolution, particularly in hard disks, that's driven recent gains, according to SFA (Oxford), a critical minerals consultancy.
'As AI rolls out, as data storage requirements increase, you need a technology which is still cheap, cost-effective and can store large quantities of data,' said analyst Sandeep Kaler. Technology that leans on other elements is still very expensive, which means demand for ruthenium will keep rising unless cheaper alternatives can be found, she said.
The metal is very hard to come by, and it's not traded on any exchanges. Traders are scrambling for any supplies they can get, and even major buyers are having trouble sourcing ruthenium, according to two traders who asked not to be named as the information is not public.
Dwindling production is likely to provide further support to prices. The annual supply of the mineral, which is mostly derived as a byproduct of platinum, was just 30 tonnes last year, and is expected to fall due to a lack of investment after many lean years for prices, said Kaler. The market is likely to tip into a deficit next year, where demand outstrips supply, she said.
But the amounts used are minuscule. In hard disk drives, ruthenium allows for greater density of data and appears as a film less than a nanometre thick.
Growth in cloud computing is set to raise hard disk sales by 16 per cent this year, according to figures from International Data cited by Bloomberg Intelligence, which will in turn fuel ruthenium consumption. BLOOMBERG
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