Ruthenium Prices Surge to $800/Ounce, Outpacing Gold and Silver Amid AI Demand

Ruthenium, a silvery gray mineral, has surged in price over the past year, nearly doubling to $800 an ounce. This outpaces the rallies in gold and silver, driven by increasing demand for the metal in AI applications. Ruthenium is used in the production of superconductors, catalysts, and other advanced materials. Its price has risen significantly due to strong demand from the tech industry.

Ruthenium, an ultra-rare silvery-gray mineral, has seen a remarkable surge in price over the past year, nearly doubling to $800 an ounce. This significant increase outpaces the rallies in gold and silver, driven primarily by the burgeoning demand from the artificial intelligence (AI) sector. Ruthenium, prized for its exceptional hardness and versatility, is used in various advanced materials, including superconductors and catalysts.

The AI revolution, particularly in data storage technologies such as hard disk drives, has been a major driver of this demand. According to SFA (Oxford) Ltd., a critical minerals consultancy, the increasing data storage requirements for AI applications are fueling the demand for ruthenium. Ruthenium allows for greater density in data storage, appearing as a film less than a nanometer thick in hard disk drives. The growth in cloud computing is expected to raise hard disk sales by 16% this year, further boosting ruthenium consumption [1].

The scarcity of ruthenium, which is mostly derived as a byproduct of platinum, is compounding the issue. Annual supply of the mineral was just 30 tons last year and is expected to fall due to dwindling production and a lack of investment [1]. The market is likely to tip into a deficit next year, where demand outstrips supply, according to Sandeep Kaler, an analyst at SFA (Oxford) Ltd.

The recent surge in ruthenium prices is also influenced by the broader trend of increasing investment in AI startups. For instance, Thinking Machines Lab, an AI startup founded by former OpenAI executive Mira Murati, has raised $2 billion in funding led by Andreessen Horowitz, with participation from Nvidia, Accel, ServiceNow, Cisco, AMD, and Jane Street. This massive funding round underscores the investor enthusiasm toward new AI startups, which is driving demand for raw materials like ruthenium [2].

In conclusion, the rising demand for AI applications is significantly impacting the price of ruthenium, an ultra-rare metal. The combination of increasing demand and dwindling supply is likely to sustain the upward trend in ruthenium prices, making it a focal point for investors and financial professionals.

References:
[1] https://finance.yahoo.com/news/ultra-rare-metal-rides-ai-043044813.html
[2] https://economictimes.indiatimes.com/tech/funding/mira-muratis-ai-startup-thinking-machines-raises-2-billion-in-a-round-led-by-a16z/articleshow/122523250.cms