Wednesday November 15, 7:36 am Eastern Time
Anglo Platinum sees strong market
JOHANNESBURG, Nov 15 (Reuters) - Anglo Platinum (Angloplat), the world's largest platinum producer, on Wednesday forecast sustained robust demand for platinum group metals (PGMs) and said surging prices were justified by market fundamentals.
Chief Executive Barry Davison said strong jewellery demand particularly from China, auto-catalyst use and tight Russian platinum stocks would continue to support prices, which hit a 12-year high of $612/oz in August.
``Prices in real terms are lower than a dozen years ago. In terms of the history it's not excessive...it's not serious at all,'' Davison told the World Platinum Congress.
Platinum on the spot market was quoted at $588-598, a level which some analysts say could dent demand for the metal, as has happened in the Japanese luxury goods market.
``There is the possibility of a spike in the platinum price to $600 an ounce, but the market would quickly give up the gains,'' Davison said.
Platinum was fixed in London at $592, up from its previous fix of $591. Palladium was fixed $1 higher at $780, versus a record high of $855 reached in August.
Angloplat shares were trading 1.4 percent higher at a year-high of 331.60 rand on the Johannesburg bourse.
Impala Platinum , the world's second largest platinum producer, was up 0.84 percent at a year high of 383 rand as both firms led a rally in resources firms which have benefited from higher commodity prices and a weaker rand.
Global demand for platinum and palladium is expected to again exceed supply this year, maintaining prices near recent highs despite a 11 percent increase in platinum supplies to 5.41 million ounces led by higher Russian exports, according to industry analysts Johnson Matthey.
South African platinum supplies are forecast to reach 3.92 million ounces this year, up 20,000 from 1999, while palladium supplies are pegged at 1.96 million ounces from 1.87 million.
Matthey in its interim review of the PGMs market released on Tuesday forecast platinum demand rising two percent this year to a record 5.69 million ounces, meaning prices for the metal would remain in a range of $560-630 over the next six months.
The auto industry is expected to increase its purchases of platinum for the first time in four years in 2000 in order to meet stricter emission limits for diesel cars in Europe.
ANGLOPLAT TO LIFT OUTPUT
Davison, whose company supplies 43 percent of the world's platinum, said Angloplat's own output of PGMs in 2001 would be well up on this year, but he declined to give an estimate.
Angloplat is forecast by analysts to produce around 1.9 million ounces of platinum this year, 100,000 down on last year as a result of heavy flooding and a miners strike. The firm also produces around one million ounces of palladium.
Angloplat was on course to meet its target of lifting platinum output to 3.5 million ounces within the next five-and-a-half years, Davison said.
The company is near to completing mine projects at Amandelbult, Middlepunt Hill and Bafokeng-Rasimone and began a new project at Maandagshock earlier this year.
Davison said China would play a key role in platinum demand after emerging as a third of the PGM jewellery market.
``China will overtake Japan, which is contracting, either this year or next,'' Davison said.
Matthey forecasts Japanese platinum demand falling to 1.51 million ounces this year from 1.83 million in 1999, led by a decline in jewellery use.
The PGM market would also be supported by limited Russian stockpiles of platinum. ``As far as platinum is concerned there is not much left,'' Davison said.
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