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Johannesburg - Shares of Lonmin [JSE:LON] and other platinum miners gained as rising spot platinum prices traded above gold for the first time since September 1.
Platinum briefly touched $1 698.50 an ounce, just above the price of spot bullion.
Signs of a recovery in the United States, the world’s top economy, have been supportive of platinum prices, given the metal’s industrial use.
Lonmin, the world’s No 3 platinum producer, gained 1.7% to R127.47. Bigger rival Anglo Platinum [JSE:AMS] was up 0.8% at R553.02.
Platinum briefly touched $1 698.50 an ounce, just above the price of spot bullion.
Signs of a recovery in the United States, the world’s top economy, have been supportive of platinum prices, given the metal’s industrial use.
Lonmin, the world’s No 3 platinum producer, gained 1.7% to R127.47. Bigger rival Anglo Platinum [JSE:AMS] was up 0.8% at R553.02.
Platinum rallied for a fifth day in a row on Tuesday, its longest streak of
gains since October that took the price above that of gold for the first time in
six months, while gold itself fell below $1,700 an ounce ahead of a US rate
decision later.
The price of platinum has gained more than 20 percent so far this
year, propelled by supply disruptions in South Africa, the world’s largest
producer, where safety stoppages and illegal strike action at a major mine have
eroded output.
Spot platinum was bid at $1,692.50 an ounce by 1050 GMT, up 0.2
percent on the day, compared with a 0.3 percent fall in the gold price, which
was quoted at $1,692.05 an ounce.
Bullish
Bullish
“We have been ragingly bullish on platinum this year. We perhaps
got in a tiny bit too early, but this is one we have been plugging very
strongly,” Nic Brown, head of commodity strategy at Natixis said.
“We think the fundamentals of platinum are much better than gold’s
fundamentals,” he said, adding that industrial demand for platinum from the
European auto market was likely to be lacklustre, while jewellery demand in key
consuming nations such as Japan and China could help offset that.
Much of the boost to the platinum price this year has come from a
month-long stoppage at world number two producer Impala Platinum Holdings [JSE:IMP] largest
facility at Rustenburg, which the company said cost it nearly 200,000 ounces in
production and would likely cut deliveries in April by up to 50%.
A government crack-down on safety in mines that started in the
later stages of 2011 led to sharp decreases in output at some of Impala’s major
rivals, such as Anglo Platinum, Aquarius and Lonmin.
The demand side of the platinum market is less rosy. Platinum
relies most heavily on the European auto market for consumption, where it is
used in catalytic converters in diesel-powered vehicles and where the euro zone
debt crisis threatens to push the entire region into recession.
