Platinum prices in the global market are expected to touch a new high of $2,400 an ounce this year mainly because of supply disruptions from South Africa, according to London-based precious metals consultancy GFMS.
The agency expects considerable volatility in the prices of platinum and palladium in 2008. The forecasts trading ranges between $1,700 and $2,400 for platinum, and between $400 and $550 for palladium. Concerns about supply disruptions in South Africa, the world?s biggest platinum producer, pushed prices to a series of record highs earlier this year. Platinum prices have soared nearly 30% over the last three months.
?We would expect the higher end of these ranges to coincide either with further difficulties in South Africa or gold prices breaking strongly through the $1,000 level,? GFMS said in its Platinum and Palladium Survey 2008, which was released on Thursday. Driven by the fall in mine production, platinum was plunged back into a deficit of just over 2 lakh ounces. Although mining resumed as 90% of power was restored, there is considerable uncertainty over the effects of this on production levels for 2008, with expansion projects also in play. The survey reports that world platinum jewellery fabrication fell by 13% in 2007.
?A further fall in jewellery demand is almost inevitable and it will probably be more dramatic than in 2007,? Peter Ryan, GFMS? senior consultant in charge of PGM said. During 2007, ETFs have emerged as a new factor for platinum and palladium. ETF investment is now important factor for prices and lease rates but does not cause changes in the totality of above-ground stocks. The dominant factor for platinum in 2007 was a sharp decline in global mine production. Output from South Africa stumbled badly, as six years of uninterrupted growth were thrown into reverse.