Platinum Passes $2,000 for First Time
Carpenter & Halia Pavliva
$2,000 an ounce for the first time in London and
New York after mining disruptions in South
Africa squeezed supplies at a time of increased
Platinum for immediate delivery gained as much
as $89.75, or 4.7 percent, to $2,001.25 an ounce
in London. It traded at $1,974.50 an ounce as of
4:49 p.m. local time.
Platinum futures for April delivery rose $54.70,
or 2.9 percent, to $1,976.50 an ounce at 11:46
a.m. on the New York Mercantile Exchange after
reaching $2,001.40 earlier, the highest ever for
a most-active contract.
``Platinum's surge in price is reflecting the
difficult mining conditions that have left
producers to cut production forecasts in a
market that already is experiencing a deficit,''
said Ralph Preston, a senior market analyst at
Heritage West Financial Inc. in San Diego.
``Producers cannot meet demand.''
Prices have advanced for six years as mines in
South Africa, source of about three-quarters of
the world's platinum, couldn't keep pace with
soaring demand from jewelers and automakers. New
investment products have added to the squeeze.
``I'm getting a lot of calls asking, `How do I
invest in platinum?','' said Derek Engelbrecht,
a marketing executive of Johannesburg-based
Impala Platinum Holdings Ltd., the world's
second-largest platinum producer.
South Africa's state utility, Eskom Holdings
Ltd., has asked miners and other industrial
customers to cut power use to 90 percent of
normal needs. Most of South Africa's mines were
shut for five days last month after Eskom ran
short of generating capacity.
``The market is saying it doesn't believe we can
get this power consistently,'' Engelbrecht said.
He estimates annual production was reduced by no
more than 100,000 ounces from the power cuts.
Barclays Capital director Martyn Whitehead
estimates the output cut for the full year at as
much as 500,000 ounces.
Assets in platinum-backed shares created by ETF
Securities Ltd. represent about 5 percent of
annual global production, the company said Feb.
5. Those and similar products have taken about
211,000 ounces off the market since Nov. 1, UBS
AG estimated. Supply fell short of demand by
265,000 ounces last year, according to
London-based metals trader Johnson Matthey Plc.