Charlotte Mathews
19 November 2008
Johannesburg — PLATINUM was likely to trade between $700 and $1400/oz and palladium between $125 and $300/oz in the next six months, depending whether markets remained bearish or recognised the positive fundamentals for both metals, according to Johnson Matthey's interim review.
Platinum peaked at $2276/oz in March on SA's electricity shortages, operational problems and safety-related stoppages, but had dropped to $825/oz yesterday on fears of global recession.
Johnson Matthey, which uses platinum group metals in products such as autocatalysts and chemicals, forecast the platinum market would show a deficit of 240000oz this year, mainly because of the fall in production from SA and firm demand from the autocatalyst sector.
Despite the slowdown in new vehicle sales in North America , gross demand for autocatalysts, taking recycling into account, would rise 2,1% on last year, as more diesel particulate filters were being fitted on light duty vehicles in Europe.
The palladium market was likely to show its smallest surplus for several years, at 320000oz, because of lower sales from Russia and reduced production from SA, while demand from the autocatalyst, jewellery and investment sectors was likely to rise.
Palladium and platinum investment differed, Johnson Matthey publications manager David Jollie said. Palladium investment had a shorter history than platinum and, because platinum was better known, it attracted more speculators. Many palladium investors were Swiss, taking a long-term view on the ending of Russian sales of stockpiles.
Jollie said Johnson Matthey had not revised its forecasts for the year after Monday night's announcement from palladium miner Stillwater that it would cut output at its East Boulder mine, and last week's outage at Anglo Platinum's Polokwane smelter. During repairs to the Polokwane smelter, Angloplat would build up stockpiles.
Alison Cowley, Matthey's principal analyst for market research, said platinum production in SA was likely to recover next year.
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