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* Investment in rhodium ETCs rises to 65.2 mln eur in Q1
* Metal prices still awaiting recovery after 2008 sell-off
By Jan Harvey
LONDON, April 4 (Reuters) - Funds invested in DeutscheBank's rhodium exchange-traded commodities rose 20 percent inthe first quarter as a tightening market balance and gains inits sister metals platinum and palladium caught buyers'attention.
The 11 million euro ($14.13 million) inflow into the fundwas similar to that seen in the first three months of 2012 butdouble the fourth quarter's 5.4 million euros. The increaselifted assets under management to 65.2 million euros from 54.2million euros.
The bank said there are now 68,659 ounces of rhodium backingthe U.S. dollar- and euro-denominated products it operates, which were launched in May 2011. The products issuesecurities backed by a tenth of an ounce of metal.
Rhodium , which is of the same chemical family asplatinum and palladium, is chiefly used in catalytic converters.
Prices were hit hard by weakness in car demand during thefinancial crisis, slummping from more than $10,000 an ounce inmid-2008 to $1,030 at the end of last year. They have sinceedged up to $1,165 an ounce.
"Although rhodium has similar properties and is used for thesame purposes as platinum and palladium, save for jewellery, itsprice hasn't similarly recovered from the 2008 correction," aspokesman for Deutsche Bank said.
"Investment interest would largely be driven by the hopethat rhodium will catch up with the other two platinum metals."
The inflow into the rhodium ETCs mirrors interest inplatinum- and palladium-backed exchange-traded products,holdings of which rose in the first quarter even as gold-backedETPs saw record outflows.
Metals refiner Johnson Matthey forecast that the rhodiummarket would swing into a 43,000-ounce deficit last year on acombination of rising demand and lower output from both minersand refiners.