Platinum-group metals prices to rebound
Demand growth, supply tightness are the key issues
Tom Stundza -- Purchasing, 7/1/2009 2:12:39 PM
Prices of platinum-group metals, which collapsed in early 2009, may recover this year because of tight supply and growing investment demand, "and are expected to continue rising over the next few quarters," CPM Group says in its annual Platinum Group Metals Yearbook.
The midyear price average for platinum of $1,095 compares with the 2008 annual average of $1,578, while palladium at $217 compares with $363 and rhodium at $1,149 is way below the $6,474 of 2008. "The prices for these metals aren't expected to decline significantly from current levels and are expected to show signs of strengthening toward the end of the year," the CPM Group suggests.
Lately, though, investment demand "has been the crucial factor in driving prices higher" for platinum, palladium and rhodium, the New York-based market research house reports. Looking ahead through 2010, "investment demand in these commodities is expected to remain healthy" while "supply is expected to remain a concern."
Fabrication demand, which comes mainly from the auto catalyst sector, "is expected to show some signs of improvement toward the end of this year, or by 2010," as the world auto industry drives away from the recession, CPM Group predicts.
Production of platinum, the largest of the metals, is expected to decline this year in South Africa, U.S., Canada and Russia. Total global platinum production is predicted to be 5,349,000 ounces this year, a 2% decline from 5,459,000 ounces in 2008.
The market report says many of the supply-side issues remain in South Africa, the single-largest national source of platinum group metals. The report suggests that "many of the present concerns faced by the South African platinum industry are not expected to be resolved any time soon" and cites power shortages, a shortfall of skilled labor, safety-related mining issues and periodic labor strife. Also, when these platinum group metals are produced as byproducts of base metals, a common mining practice in Canada, "output is expected to decline sharply (in) the medium term," the report says.
See also: Platinum price projections up.
CPM Group sees palladium deficit for '98
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