Wolf Mountain/platinum group metals ... Looks like the demand for platinum/palladium/rhodium will exceed supply for the forseeable future.
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This Week In Platinum
Number 401, February 27th, 1998
Russian Platinum Stocks "Nearly Exhausted" Says Standard Bank
METALS MARKET OVERVIEW
Platinum prices wavered somewhat at the beginning of the week, with declines in gold and silver leading the way. Later in the week platinum regained its earlier position. The Russian Duma's rejection of its budget last Friday caused some concern that platinum exports from Russia might face further delay. "Should Russian exports remain corralled until March or April, platinum prices are expected to hold above support around $375 - $380," said Jeffrey Christian, of CPM Group, earlier this week. Japan imports of platinum rose 11.4% year-on-year in December of 1997, reports Reuters, despite concerns about a weakening Japanese economy.
Standard Bank of London released their annual platinum book today, saying that "Sales from [the Russian's] legendary stockpile appear to be nearly exhausted... Amplats (Anglo American Platinum) is the only South African producer in a position to significantly take over the market share that is likely to arise from the demise in Russian sales." Standard Bank went on to caution car makers against over-reliance on platinum group metals. "Automobile manufacturers should consider very carefully when basing their ability to sell cars on the assurance of supplies which may well be subject to unexpected delays and which can only be contracted on a short-term basis," said the report. The effects of Russian supply delays tend to be more severe for the palladium market than for the platinum market, most of which is supplied by South Africa.
Standard Bank also said at the annual survey release that rhodium could reach $800 in fairly short order. Rhodium is a member of the platinum group metals family, and is used in conjunction with platinum in autocatalyst manufacture. Rising lease rates are making it increasingly unattractive to borrow rhodium, and is increasing the incentive for industrial consumers to buy the metal outright.
Chamber of Mines president Bobby Godsell points to market fears of central bank gold dumping as the cause for gold price declines. Reuters quoted Mr. Godsell as saying, "Every piece of serious evidence indicates that this is not the case. Privately central bankers indicate this is not the case. Yet thus far, publicly they have remained largely silent. What can be done about this damaging silence?" Godsell was speaking at a conference of mine unions and the mining industry, working to form an agreement to forestall general strike action in South Africa over mining industry layoffs.
Bank of France Governor Jean-Claude Trichet reiterated his support of including gold in the European Central Bank. He added that the Bank of France would maintain its gold position regardless of the ECB's final reserve composition. Mr. Trichet is following a long-held Gaullist tradition of belief in gold as the foundation for sound money...
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