In a bit more detail:
Platinum Surges, Palladium Rises to Record, on Shortage Concern
Bloomberg News
Jan 28 2000 5:33AM ET
Platinum Surges, Palladium Rises to Record, on Shortage Concern
London, Jan. 28 (Bloomberg) -- Platinum surged almost 7 percent to its highest price since 1997, and palladium rose to a record, as concern mounted that increasing demand and limited exports from Russia is creating a shortage.
Platinum and palladium are essential to automotive-exhaust systems that reduce pollution. Rising car sales and stricter emission laws are fueling demand at a time when Russia, the biggest palladium producer and No. 2 platinum supplier, is restricting exports.
``The market is crying out for metal and there is none,' said Fidelis Madavo, an analyst at Investec Securities Ltd. in Johannesburg. ``The Russians are playing cat and mouse with the Western market.'
Platinum for immediate delivery rose as much as $31.75, or 6.9 percent, to $495.50 an ounce, its highest price in London since June 1997, when a six-month halt in Russian shipments created a shortage of palladium. The gain was the largest since June 1997.
Palladium for immediate delivery advanced as much as $14, or 2.9 percent, to a record $492.50 an ounce. Rhodium, a similar metal, is trading at about $1,425 an ounce, up 45 percent this month, according to Metal Bulletin Ltd. estimates.
The cost of borrowing platinum for one month is more than 40 percent in the London market, indicating there is a shortage of metal readily available, traders said. Traders often borrow metal to fulfill commitments to deliver, betting they can repay the loans at lower cost in the future.
Rushing to Buy
Russian producer RAO Norilsk Nickel, which supplies most of the country's platinum-group metals, said earlier this month that platinum exports would be allowed soon, though some traders said no metal has arrived.
``Industrial demand is growing, but there is still no sign that Russia started shipping platinum,' Yasushi Hiraoka, an analyst at Central Shoji., a Japan-based futures-trading company. ``Manufacturers, seeing their stockpiles falling, are rushing to buy platinum before the price goes higher.'
Demand for platinum outstripped production last year, forcing manufacturers to deplete inventories, according to the latest estimates from Johnson Matthey Plc, a London-based refiner and trader of the metal. Johnson Matthey estimates that global demand totaled 5.6 million ounces last year, compared with supply of 5.1 million ounces.
``Russia is probably already supplying the market with small amounts of metal, but people are realizing that even if they do export more, the market will be in deficit,' said Frederic Panizzutti, head of strategy at MKS Finance SA in Geneva. ``The fact is the demand is there, and there is no liquidity -- people are looking for metal everywhere.'
Palladium
Palladium consumption is also running ahead of supply. In 1999, users needed 8.3 million ounces of the metal, though only 7.7 million ounces were produced, Johnson Matthey said.
``The situation hasn't changed today, but something has changed in peoples' minds,' Panizzutti said. ``The key question is, how much can the industry afford to pay for the metal?'
For platinum and palladium producers in South Africa, the prices amount to a windfall. Impala Platinum Holdings Ltd. shares have almost tripled in the past year and today rose 19 rand to 276 on expectations of bumper profits.
[I still don't think market recognizes CMR as either a producer or potential producer; if and when they do, news like this should move stock. Interesting though, gold is a dog (little industrial use), but PGE at record, Ag moving, Ni way up, Cu moving, Co steady. Is our ship about to come in?] Note that lack of Russian supply is moving PGE's, PGE's in Russia come from Norilsk. Is Ni far behind? |
