Iridium Breaks Records, Dented Supply and Strong Demand Increase Cost Pressure

March turns out to be a breakthrough month for Iridium refiners and traders. Base prices of Iridium in New York, US witnessed an all-time high on the back of fierce demand which is mainly saturated in electrical, electrochemical and telecommunication sectors.

Prices of Iridium have nearly tripled since December 2020, when the rates were hovering around USD 1750 per ounce, supported by a substantial rise in demand. Also, supply side constraints from South Africa, a major producer of Iridium (contributing around 80% share in the global Iridium supply), have supported the sharp climb in the element’s pricing, globally.

Demand of Iridium is distributed among the three key sectors where electrical sector comprises around one-third of the overall demand followed by electrochemical and then by automotive which encompasses 13% of global Iridium demand. South Africa, which is still reeling under Covid-19 fallout has failed to meet the rising demand, hence creating a major demand-supply rift.

Iridium is a by-product of platinum extraction and finds varied applications in very niche products of electronics and telecommunication sectors. 5G smartphone market has provided a major boost to the demand of Iridium and, particularly Organic Light Emitting Diode (OLED) technology. Industrial price of Iridium offered by Heraeus Precious Metals, a German technology group specialized in precious metals, was assessed at USD 6,600 per ounce on March 12^th, 2021. BASF Metals Japan Ltd. also settled its Iridium offers at USD 6,000 per ounce during the week ending March 19^th.

As per ChemAnalyst, “The demand of Iridium is expected to stay on the rise in the upcoming months. According to various market experts, supply is anticipated to be on the shorter side as South Africa, where around six to eight tonnes of Iridium is mined each year, is still under coronavirus restrictions. Hence, the price is likely to stay strong even in the Q2 of 2021.”