Platinum rallies to four-month high

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Johannesburg - Platinum rallied to the highest price in almost four months on concern output in South Africa continues to struggle amid rising demand. Gold fell as the US dollar strengthened.

Anglo American Platinum, the world’s biggest producer, today reported a loss for 2012 as output of refined metal dropped 8.8 percent while costs surged and warned “supply challenges” will continue this year.

Global platinum supply fell 10 percent last year because of strikes, stoppages and shaft closings in South Africa, which accounts for 72 percent of global output, Johnson Matthey Plc estimates.

“The South African supply pipeline will remain rather unreliable over the course of the year,” Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a report e- mailed today. “More importantly, platinum is expected to be in deficit this year, with demand expected to remain strong on account of strong car sales we are seeing in a number of markets.”

Platinum futures for April delivery rose 0.6 percent to $1,698.40 an ounce by 7:44 a.m. on the New York Mercantile Exchange. They jumped as much as 1.3 percent to $1,709 an ounce, the highest since October 9.

Gold for April delivery slipped 0.3 percent to $1,664.90 an ounce on the Comex.

Platinum and related metals may have so-called price spikes this year and next on growing demand and a lack of investment in mines, JPMorgan Chase & Co. said on January 31. Autocatalysts account for 33 percent of global demand, while industrial applications make up 28 percent of usage, according to Johnson Matthey.

Car Sales

US sales of cars and light trucks rose 14.3 percent to 1,039,926 in January from a year earlier, data from Ward’s Automotive Group showed Feb. 1, while deliveries from South Africa to Russia also grew. The US added 157,000 jobs in January and there were more hirings in the previous two months than reported earlier, data showed Feb. 1.

Anglo American, also known as Amplats, last month proposed to shut four mine shafts, cutting about 7 percent of global output. The mining company reduced its annual output target to 2.1 million to 2.3 million ounces from 2.6 million ounces and is in talks with the government and the unions on proposed closings.

Platinum has surged 10 percent this year as exchange-traded products backed by the metal climbed to a record last month, compared with gold’s 0.7 percent decline.

Gold for immediate delivery fell 0.2 percent to $1,663.94 an ounce. Gold at the morning “fixing,” used by some mining companies to sell output, slid to $1,664.25 an ounce in London from $1,669 at the Feb. 1 afternoon fixing. The US dollar strengthened as much as 0.5 percent against a six-currency basket.

Palladium for March delivery was 0.3 percent lower at $754.25 an ounce, and silver for March delivery slid 1.3 percent to $31.53 an ounce. - Bloomberg

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