September 13, 2012
Platinum assets in
exchange-traded products (ETP) are poised to climb to a record as worsening
labour unrest in South Africa, the world's largest producer, threatens
supplies.Prices surged to the highest level in five months. The amount held in
ETPs was 45.727 ton on Tuesday, 1.3% below the peak of 46.316 ton in September
2011, according to data compiled by Bloomberg. Holdings have risen 8.7% since a
strike began on August 10 at Lonmin's Marikana operations in a dispute that's
led to more than 40 deaths. "All the characteristics of a store of value
that you find in gold, you find in platinum as well, so investment flow will
follow," said Dominic Schnider, global head of non-traditional assets at
UBS's wealth-management unit, who predicts record ETP holdings. "You have
a metal with shrinking supply, higher production costs, a more benign long-term
supply outlook."
The stoppage at Marikana, and
potential for disruptions at other mines as workers seek higher wages, have helped
to lift platinum to the highest level since April. ETP holdings, up 14% this
year, are also expanding as investors seek to protect their wealth on
expectations of more stimulus from the US Federal Reserve, UBS's Schnider said
in.Immediate-delivery platinum gained as much as 2% to $1,638.24 an ounce, the
highest price since April 4, and traded at $1,637.74 at 5:48 pm in Singapore.
It's advanced 17% this year, outperforming rallies in gold and palladium, while lagging behind silver's 22% climb. Wednesday's gain is the ninth consecutive climb, the best run in more than a year. Workers at Marikana, which accounts for about 10% of global production of the metal that's used to make catalytic converters and jewellery, refused to return to work after meeting government mediators. The company, the world's third-biggest producer, had lost about 50,000 ounces by September 6 because of the strike and may miss out on as much as 150,000 ounces, according to Edward Sterck, an analyst at BMO Capital Markets.The labour unrest may spread to other mines, Walter de Wet, head of commodities research at Standard Bank, wrote in a report. Marikana lies in a cluster of platinum mines that all tap the Bushveld Complex, the world's richest seam of platinum ore.
Source: economictimes.indiatimes