Riding the AI tailwind, the demand for rare metal "ruthenium" has surged, with price increases surpassing those of gold and silver
With the development of artificial intelligence technology, the demand for the rare metal ruthenium has surged, with prices reaching $800 per ounce, close to historical highs. The application of ruthenium in electronics and energy storage has driven its demand, especially in hard disk drives. Analysts predict that as AI becomes more widespread and the demand for data storage increases, the supply of ruthenium will remain tight, potentially leading to a market shortage. Despite strong demand, the usage of ruthenium is minimal, and it is expected that the growth in hard disk sales this year will further boost ruthenium consumption
With the rapid development of artificial intelligence technology, a little-known ultra-rare metal—ruthenium—is becoming one of the best-performing commodities this year.
According to data from metal refiner Johnson Matthey Plc, the price of ruthenium has nearly doubled over the past year, reaching $800 per ounce, matching the peak in 2021, and is not far from the historical high of $870 set 18 years ago, outperforming more closely watched precious metals like gold and silver.
As a platinum group metal, ruthenium is highly valued for its exceptional hardness and wide applications in electronics, energy storage, and chemical manufacturing. However, the recent significant price increase is mainly attributed to the AI revolution, particularly its application in hard disk drives.
Sandeep Kaler, an analyst at mining consultancy SFA (Oxford) Ltd., believes that with the proliferation of AI and the surge in data storage demand, the market needs a cost-effective technology that can store large amounts of data, and ruthenium fits this need perfectly. Unless a more economical alternative is found, demand for ruthenium will continue to grow.
The supply of ruthenium is extremely scarce and is not traded on any exchange. Traders report that dealers are currently scrambling to purchase any available ruthenium supply, and even major buyers are facing procurement difficulties.
The ongoing shrinkage of supply may further support prices. As a byproduct of platinum production, the annual supply of ruthenium was only 30 tons last year. Kaler indicated that due to insufficient investment caused by low prices in previous years, ruthenium production is expected to decline further this year. She predicts that the market is likely to experience a supply-demand deficit by next year.
Despite strong demand, the usage of ruthenium is extremely small. In hard disk drives, ruthenium exists in a film less than one nanometer thick, significantly enhancing data storage density. According to International Data Corporation (IDC), the growth of cloud computing is expected to drive a 16% increase in hard disk sales this year, further boosting ruthenium consumption.
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