Platinum Rises to Record on Supply Concerns; Palladium Surges
Platinum Rises to Record on Supply Concerns; Palladium Surges
By Halia Pavliva
Feb. 8 (Bloomberg) — Platinum rose to a record in New
York on mounting concern that shipments will decline from South
Africa and Russia, the world;s largest producers of the
precious metal. Palladium jumped to a six-year high.
Platinum production fell last year for the first time
since 1999, metals trader Johnson Matthey Plc said in November.
South Africa, which supplies at least three-fourths of the
world;s platinum, shipped 1.3 percent less in 2007 after fatal
accidents led to mine closings at Anglo Platinum Ltd. Supplies
from Russia, the world;s second-biggest producer, were expected
to decline 7.9 percent in 2007, according to Johnson Matthey.
“Platinum fundamentals are very good,;; said Leonard
Kaplan, president of Prospector Asset Management in Evanston,
Illinois. “No one believes there won;t be new troubles in
South Africa. It;s just one tragedy after another. And the only
other significant source of platinum supplies is Russia, and
those supplies are questionable, too.;;
Platinum futures for April delivery climbed $32.60, or 1.8
percent, to $1,884 an ounce on the New York Mercantile
Exchange, after earlier reaching $1,886.90, the highest ever
for a most-active contract. The metal climbed 6.4 percent this
week and has jumped 24 percent this year, outpacing gold and
silver.
Palladium futures for March delivery gained $12.40, or 2.9
percent, to $440.85 an ounce. The price reached $441.50, the
highest since January 2002. The metal has risen 17 percent this
year, gaining 5.7 percent this week.
Platinum and palladium are used in jewelry and auto
catalysts. Some investors buy the metals as an alternative
investment to currencies, equities or bonds.
Forecasts
Platinum may reach $2,000 an ounce later this year,
according to traders and analysts, including Ron Goodis,
futures trading director at Equidex Brokerage Group Inc. in
Closter, New Jersey.
Anglo Platinum, the world;s largest producer of the metal,
was among those South African mining companies that had to shut
some operations in the country last month.
Power shortages tied to Eskom Holdings Ltd., South
Africa;s state-owned utility, shut most mines in the country,
source of about three-quarters of world platinum supplies, for
five days last month. Eskom told major customers last week that
it won;t have sufficient capacity to guarantee adequate power
until 2013.
“Russia has a long history of taking advantage of
situations like that,;; Kaplan said.
Projected Supplies
Russia was expected to supply 820,000 ounces of platinum
in 2007 and 4.24 million ounces of palladium, Johnson Matthey
said in November. Platinum supplies from South Africa were
expected to total 5.22 million ounces in 2007 and palladium
supplies were expected at about 2.8 million ounces, according
to Johnson Matthey.
Citigroup Inc. this week lowered its 2008 forecast for
platinum output in South Africa by 5 percent. The country
produced almost 5.3 million ounces of the metal in 2006.
To contact the reporter on the story:
Halia Pavliva in New York at
