TD Securities: Rhodium Headed for Surplus by 2027 as Car Demand Softens

September 30, 2026MapleBull1 min readRhodium

A fresh TD Securities forecast sees rhodium tipping into surplus by 2027 on weaker auto demand — but the bank warns thin inventories could still spark sudden price spikes.

The multi-year rhodium squeeze may be running out of road. TD Securities projects that cooling automotive demand will push the platinum-group metal into surplus by 2027, ending a four-year stretch of deficits that propped up prices.

Rhodium's fortunes are welded to the internal-combustion engine. Nearly all of it goes into catalytic converters, where it strips nitrogen oxides from gasoline exhaust. When US and global vehicle output slows, and when automakers keep thrifting — designing progressively less of the pricey metal into each unit — demand simply fades. The slow build-out of battery-electric vehicles, which skip the converter entirely, adds another long-term drag.

But a surplus forecast does not mean a quiet market. Rhodium is one of the least liquid metals a US investor can touch. It has no major futures contract and trades over the counter in small volumes, with inventories running thin. TD makes the point directly: scarce metal means prices remain vulnerable to sharp spikes. Most of the world's supply comes from a handful of South African mines, so a single outage or power crisis there can ignite a rally regardless of the underlying balance.

For the narrow group of US buyers and investors exposed to PGMs, the message is layered. The medium-term structural trend TD lays out leans lower, yet the market's plumbing means violent, short-lived rallies stay firmly on the table.

At a glance

What happened: TD Securities has forecast that rhodium, one of the smallest and most volatile platinum-group metals markets, could move into surplus by 2027 as weakening automotive demand erodes the deficit that has defined the past four years. Rhodium is used almost entirely in catalytic converters to neutralize nitrogen oxide emissions from gasoline engines, so its price is tightly bound to internal-combustion vehicle production and to thrifting — automakers engineering less of the costly metal into each converter. TD's view is that as auto demand softens and substitution continues, supply and demand rebalance and the years-long squeeze ends. The bank cautions, however, that inventories remain thin, leaving the market exposed to sharp price spikes on any supply disruption. Rhodium is not traded on a major futures exchange and trades in a narrow over-the-counter market, which amplifies moves in both directions.
Why it matters: For US investors, rhodium is a specialist holding priced in dollars, so a stronger greenback and softer auto demand can weigh on it from two directions at once. There is no liquid US futures market for the metal, and physical dealer premiums are steep, which magnifies the cost of getting in and out. TD's surplus call underscores that this is a thin, spike-prone market rather than a smooth trend to lean on.
What to watch: Keep an eye on US and global auto production figures and on South African mine supply, the swing factor behind rhodium's price spikes. Domestically, the Federal Reserve's rate path and the dollar's direction shape demand across the metals complex, and any revised outlooks from TD Securities or rival PGM desks will refine the surplus timeline.

The MapleBull View

Bearish

MapleBull reads the structural setup as bearish for rhodium's price floor over the medium term: the demand story rests almost entirely on internal-combustion auto production, and both thrifting and the slow drift toward EVs chip away at that base while a projected surplus removes the scarcity premium that drove past rallies. That said, this is not a metal we treat as a directional bet — rhodium's market is tiny, illiquid and prone to violent spikes, so a surplus forecast and a sudden price surge are not contradictory. Our bearish lean is about the trend, not the day-to-day tape, and the volatility cuts both ways.

Bull case

Inventories are unusually thin, so any supply disruption from South African mines could trigger an outsized price spike
Rhodium's tiny, illiquid over-the-counter market amplifies upside moves when buyers scramble for metal
A projected surplus is a forecast, not a certainty — mine outages or power problems in South Africa could keep the market tight for longer
The metal's price has a history of violent rallies from oversold levels

Bear case

TD projects a shift from deficit to surplus by 2027 as auto demand weakens
Continued thrifting means automakers keep designing less rhodium into each catalytic converter
The gradual rise of battery-electric vehicles erodes the internal-combustion base that underpins rhodium demand
A four-year supply squeeze that supported prices is expected to unwind

Sources

MapleBull researched this story from the following reporting. We summarize and analyze — we don't reproduce source articles.

TD sees rhodium surplus ending four-year squeeze ↗
Mining.com · Sep 30, 2026

rhodiumplatinum-group metalsTD Securitiesauto demandsupply and demand

MapleBull's analysis is researched and drafted with AI assistance from the cited sources, then quality-checked before publishing. It is for general information only and is not financial, investment, or trading advice. Prices and market conditions change quickly — do your own research before buying or selling.

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