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PGMs have been holding up well the past 6 months despite the PMs getting beaten down.
Analysts: Record Age Of U.S. Autos Portends Pent-Up Demand For PGMs
20 January 2012, 2:11 p.m.
By Allen Sykora
Of Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20120120AS_pgms.html
(Kitco News) - The average age of automobiles on American roads has hit a record high, and analysts say this could be a harbinger of pent-up U.S. demand for vehicles and by extension for platinum group metals.
Still, while this is price-supportive, they say, the bigger key for the metals during 2012 will be the demand that emerges from developing nations such as China.
Polk, a global automotive-market research firm based in Southfield, Mich., issued a report this week saying that the average age of cars and light trucks in operation in the U.S. hit 10.8 years in 2011, a record high. This is up from 10.6 years in 2010.
The average vehicle age has been increasing “quickly” over the past five years, Polk said. It had stood at 9.8 years in 2007, the year before the financial crisis hit. Polk compiles the data based on analysis of national vehicle registration data.
Several analysts and traders told Kitco News that the report reinforces what the market already knows—there has been a significant decline in U.S. auto sales during weak economic conditions in recent years. This had ramifications for platinum group metals, since their main industrial use is catalytic converters.
But motor vehicles only last so long and eventually have to be replaced, meaning potential for a spurt in PGM demand at some point in time.
“That study shows there is some pent-up demand, and that’s going to be a tailwind for consumer auto sales in 2012 and 2013,” said KC Chang, senior economist who tracks platinum group metals for the consultancy Global Insight.
Rohit Savant, senior commodities analyst with CPM Group, said the pent-up demand was already reflected by increased auto sales during 2011, even though the economy remained on soft footing.
Global Insight’s IHS Automotive unit has projected U.S. sales of cars and light trucks in 2012 of 13.5 million units, which would be an increase from 12.7 million a year ago, Chang said.
“So these statistics (on record vehicle age) show there is a replacement cycle that needs to go through in the next 12 to 24 months,” Chang said. “But with that said, it’s still weak. The auto industry is still not out of the woods.”
Prior to the financial crisis, sales tended to be 15 million to 17 million units a year.
“We’re still below the historical trend,” Chang said. “But you could say there are green shoots in terms of consumers coming back into the market. It’s because you can’t really extend the cars’ lives that much longer. We’re already at historical highs, so you’re going to see some people come back into the market.”
Still, any improved U.S. demand for cars is only one part of the puzzle for PGMs, analysts said.
“On balance, it (aging U.S. cars) is a bullish factor for PGMs,” said Bill O’Neill, one of the principals with LOGIC Advisors. “The real key is an overall economic recovery that includes the U.S., Europe and Asia, and in particular demand for cars in India, China and other developing nations. I would be optimistic on that type of demand.”
Chang’s firm looks for a mild recession in Europe this year, with near-zero growth in auto sales. However, China’s economy has continued to grow, although at a slower rate. The country has become the world’s largest auto market and tends to rely upon gasoline-powered engines that can use palladium, which is far less expensive than platinum.
“In terms of global palladium demand, it still hinges upon emerging markets and how you see (sales of) consumer autos developing in those economies,” Chang said. He later added: “We think platinum and palladium prices are going to be moving upwards over the second half of this year. The statistics (on aging U.S. cars) is a tailwind for this growth, although improvements in the U.S. auto sector may not be the primary source of stronger platinum and palladium prices in 2012.”
An aging U.S. auto fleet also has ramifications for secondary, or recycled, supply of PGMs, analysts said. A trader said scrapping of cars presumably means more recycling of PGMs. However, newer vehicles tend to have higher PGM loadings to meet more strict emissions standards, CPM Group’s Savant said. So when the older vehicles are eventually scrapped, they result in less secondary supply than otherwise might have been the case, he explained.
By Allen Sykora of Kitco News; asykora@kitco.com
Scoreboard for the week: +2.20%
Platinum Appears To Have Stabilized Above $1,400/Oz – Commerzbank
20 December 2011, 8:40 a.m.
By Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNewsMarketNuggets20111220.html
(Kitco News) - Platinum appears to have stabilized above the $1,400 an ounce level for now, says Commerzbank. Weakness for the metal mainly came from selling by speculative financial investors, according to market positioning statistics, the bank says. They note that money managers in the CFTC data cut their net long positions in the week to Dec. 13 for the fourth week running and short positions reached their highest level since the start of this data series. Sister-metal palladium saw a similar story: net long positions are at their second-lowest level ever, they say. “The difference between palladium and platinum is that both long and short positions in palladium were reduced. What is more, we are still seeing strong selling of palladium ETFs, holdings of palladium ETFs tracked by Bloomberg having now plummeted to their lowest level since March 2010,” Commerzbank says.
By Debbie Carlson of Kitco News; dcarlson@kitco.com
Platinum has been taking a beating recently...
The gold price has surpassed platinum... WOW!!!
For the week: -0.01%
May 31, 2011 17:15 NY Time Platinum 1831.00 +34.00 Yep, a big day!!!
UPDATE: Johnson Matthey: Platinum Market Close To Balanced In 2010
16 May 2011, 01:18 p.m.
By Kitco News
http://www.kitco.com/
http://www.kitco.com/reports/KitcoNews20110513ASKN_jm_plat.html
(Kitco News) - (Updates earlier story with fifth paragraph comparing balance to GFMS report earlier this month)
The global platinum market was close to balanced in 2010 as the surplus narrowed to 20,000 ounces from 635,000 in 2009, said Johnson Matthey in its “Platinum 2011” report released Monday.
Supplies rose, and there was a pronounced increase in recycling, but the market ended up nearly balanced anyway due to resurgence in automotive and other industrial demand, Johnson Matthey said.
Growth in auto and industrial demand is expected to continue, with a limited expansion in supplies, Johnson Matthey said. Against this backdrop, the company forecast that the price of platinum will average $1,870 per ounce in the next six months, compared with an average of $1,762 during the six months to the end of April.
“With positive supply-demand fundamentals and continuing global economic growth, platinum could trade as high as $2,000 in the period,” Johnson Matthey said. “If interest rates in key markets remain low, speculative investment interest should also support platinum’s price. Although external shocks such as oil price rises or negative sentiment surrounding sovereign debt could once again prove to be a drag on the price, strong physical buying in China is likely to give support during price dips, meaning platinum is unlikely to fall below $1,750.”
At first glance, the report of a 20,000-ounce surplus appears vastly different from GFMS’ forecast of a 962,000 surplus for 2010 reported earlier this month. However, investment was treated differently in the two reports, with GFMS calculating the surplus before investment and Johnson Matthey calculating the balance after investment demand. Otherwise, the GFMS report showed a much smaller “residual” surplus of 412,000 ounces after subtracting 550,000 ounces in demand for exchange-traded funds.
The Johnson Matthey report said that as the global economy recovered in 2010, gross demand for platinum increased by 16% to 7.88 million ounces, according to the Platinum 2011 report.
Global supply of platinum from mining operations rose 0.6% to 6.06 million ounces, while recycling of platinum rose by almost a third to 1.84 million ounces.
Global mine supplies increased by just 35,000 ounces in 2010 in what Johnson Matthey described as a mixed year for producers. Although refined production in South Africa rose, not all of this metal was shipped by year-end, leading to sales of platinum from South Africa that remained flat at 4.64 million ounces. Russian platinum shipments climbed by 5% to 825,000 ounces. Supplies from Zimbabwe grew by almost a quarter to 280,000 ounces following a ramp-up of expansion projects in the country.
Auto, Other Industrial Demand For Platinum Rises In 2010
Demand for platinum in auto catalysts rose by 43% to 3.13 million ounces last year as the global automotive sector bounced back from a weak 2009, Johnson Matthey reported. In particular, this was boosted by a recovery of demand for diesel-powered vehicles in Europe, said Tim Murray, general manager of precious metals marketing for Johnson Matthey.
“Platinum is the dominant metal used in diesel technology,” he said. “So the fact the diesel market recovered from its lows of late 2008 and all of 2009 really helped platinum demand.”
Better economic conditions led to increased purchases of fleet vehicles, which tend to be diesel-powered vehicles, and the end of national car-scrapping programs meant those vehicles recaptured market share, Johnson Matthey said.
“In addition to auto-catalyst demand, you also had strong demand on the industrial side...specifically in the areas of LCD glass and also chemical catalysts coming out of Asia,” Murray said.
The industrial demand for platinum jumped by 48% to 1.69 million ounces in 2010, the report said.
Economic recovery in developed markets, and strong growth in emerging ones, drove higher levels of production of electrical, glass and chemical products which use platinum either in the finished item or in the manufacturing process, Johnson Matthey said. There was a strong increase in purchases of platinum for the manufacture of LCD glass, used in televisions and electronic displays. Demand for platinum in the chemical industry increased as plants were run at higher capacity to supply the growing markets of India and China.
However, purchases of platinum by the jewelry sector fell by 14% to 2.42 million ounces in 2010. Still, demand from the key Chinese jewelry market was still considered robust at 1.65 million ounces, although this was down 430,000 compared to a record level in 2009. A combination of higher metal prices and full stock levels contributed to the decline. However, demand in China was higher than in 2008, the last time platinum’s price was at similarly high levels to 2010.
Net Physical Investment In Platinum Remained Strong In 2010
Net physical investment demand for platinum remained strong in 2010 at 650,000 ounces, which was similar to the previous year, Johnson Matthey said. This was stimulated by low interest rates and a positive outlook for supply-demand fundamentals.
Investors bought heavily into a newly launched physically-backed platinum exchange-traded fund in North America. Holdings in the more mature European ETFs declined slightly.
Johnson Matthey looks for investment demand to rise further in 2011, although the pace of the increase will be less than last year simply because much of the pent-up demand already occurred after the ETF launch in the U.S.
“The investment sector is probably going to cool off a bit only because we saw such explosive growth with the launch of the ETF Securities product (in the U.S.),” Murray said. He later added: “We expect to see net investment demand grow in terms of physical holdings in the products themselves. But you’re not going to see that straight line up like you saw beginning in January 2010.”
By Allen Sykora of Kitco News; asykora@kitco.com
Lonmin's Farmer Sees Global Platinum Deficit From 2012
May 9 (Bloomberg) -- Ian Farmer, chief executive officer of Lonmin Plc, talks about the outlook for platinum prices and possible acquisitions. He speaks with Francine Lacqua on Bloomberg Television's "On The Move." (/Bloomberg)
http://www.washingtonpost.com/business/lonmins_farmer_sees_global_platinum_deficit_from_2012/2011/05/09/AFgdaMWG_video.html?wprss=rss_business
-1.38% is the scorecard for the week...
Reviewing the week: +1.63%...
My friends, for the week: +0.33%!!!
Platinum is still on the move and striking distance of 2K/oz. is nearby.
Gold in Three Currencies
http://www.kitco.com/ind/TimWood/dec082010.html
By Timothy Wood
Dec 8 2010 11:49AM
http://www.minefund.com
ST. LOUIS (MineFund.com) -- Investors in precious metals are entering a very interesting phase in the current bull market, which must be considered continuous over the last decade despite the rude but brief interruption of the global credit crisis.
Significant milestones:
Gold
1 - Crowdsourcing has been powerful for 2010 - the collective brain of the LBMA analysts has achieved a forecasting accuracy score of 96% for the year-to-date.
- Tom Kendall of Credit Suisse has an astonishing accuracy score of 99.3%, but he’s being chased hard by Ross Norman of Fast Markets (98%).
2 - The monthly average gold-silver ratio has dived to its lowest level since February 2007, averaging 48:1 so far this month.
- The previous lowest level of 47:1 from December 2006 looks in danger. The next stop after that is 44: 1 recorded in February 1998. Thereafter, it’s uncharted territory until 1985.
3 - Monthly average gold prices have taken out the prior bubble low. In May 1980, gold prices - adjusted for inflation - had tumbled to $1,361/oz. That was off the all-time high of $1861/oz averaged in January 1980, and before recovering to average $1,738/oz for September 1980. The latter is the next significant technical level for real gold prices.
- The real gold price averaged $1,356/oz over November 2010, and is currently averaging 1398/oz for December.
4 - Gold priced in a basket of commodity currencies is within 2% of taking out the all-time inflation adjusted high. The MineFund World Gold Price Index (January 2010 = 100) all-time high is 129 from January 1980 compared with the current value of 127 for December. Put another way, those currencies could exceed what has always been regarded as the most spectacular bull market in gold. That is despite them gaining significantly against the dollar in recent months.
- It is not as positive for the leading global currencies though. Gold priced in a basket consisting of the US dollar, euro, yen, Swiss franc, Canadian dollar, Australian dollar, and Hong Kong dollar is still 60% shy of its all-time high from January 1980. However, the decline of the euro has accelerated again and we expect the gap to tighten quickly.
5 - Gold priced in euros has put together 11 consecutive days above €1,000/oz. That’s the best performance since June of this year when the Greek crisis was most intense. There is every reason to believe the euro will continue to weaken in the absence of evidence that the contagion has been contained.
- Euro gold has offered the best return for gold bugs rising 41% for the year-to-date, a 10 point advantage over dollar gold.
6 - Gold priced in Sterling has breached £900/oz on consecutive days for the first time, and looks very capable of piercing £1,000/oz.
- Sterling gold is second to euro gold with a 35% return year-to-date.
7 - Yen gold has returned the least, though it still outshines most other assets, with a 16% y-t-d return. Australian dollar gold is the runner up with a 19% gain for 2010.
8 - Equities are softening again relative to gold.
- The S&P500 is trading close to the March 2009 low (in the current cycle) of 0.87x.
- The Dow is likewise struggling at 8.11x the gold price, which compares very favorably with the March 2009 low of 8.13x.
Silver
1 - The LBMA analyst peer group has achieved an average forecasting accuracy score of 90%.
- The best silver forecaster is Fred Panizzutti of MKS Finance, followed closely by Mike Ludwig of BNP Paribas.
2 - Monthly average silver prices are within range of topping a major inflation-adjusted technical level at $30/oz. The last time silver prices - in January 2010 dollars - averaged $30/oz for an entire month was February 1983.
- The next significant level is $52/oz which was averaged in September and October 1980.
3 - Silver priced in a basket of leading currencies looks ready to make the same challenge to the February 1983 levels, but it is grossly short of where it traded in September 1980. The MineFund World Silver Price Index traded at 320 compared with 172 for December to date.
4 - Silver priced in commodity currencies is doing far better, and could take out the October 1980 high having already surpassed the 1983 levels. The MineFund Commodity Silver Price Index hit 189 in October 1980 compared with 171 for December so far.
5 - Euro silver has nearly doubled so far this year, strongly outperforming every other currency. Sterling silver has returned 82% so far.
6 - Once again, the yen has been the least attractive currency in which to own silver, but it has still risen 59% for the year. Notably, you could have bought yen silver as late as August and achieved the same return.
Palladium
1 - Palladium prices have blindsided most of the LBMA analysts who were very cautious for 2010. Even so, they have so far managed to achieve a forecasting accuracy of 78% for palladium prices.
2 - Palladium is right back in its previous bubble range, and is close to taking out the previous high from June 2001 when the monthly average was $747/oz.
- The metal has now risen 4.5 fold since it bottomed out at $164/oz over December 2008, and remains the best performing metal since the global credit crisis abated.
3 - The all-time inflation adjusted high is a monthly average of $1,289/oz recording over January 2001.
Platinum
1 - Platinum has been a relatively poor performer and remains below its April 2010 highs. It has averaged $1,694/oz so far this December compared with a real average of $1,706/oz in April.
2 - It is within reasonable striking range of its all-time inflation-adjusted high of $2,077/oz set in March 2008.
3 - The platinum:palladium ratio continues to dive and is at levels unseen for a decade.
Timothy Wood
http://www.minefund.com
Swweeeeet... bottom holds and bounces all the way to 1700...
Yep, that 1500 is really holding well...
Stuck between 1500 and 1600...
Explaining the Dip in Platinum and Palladium - Kitco News, May 24 2010 11:57AM
http://www.kitco.com/Exclusive-News/
Platinum remains agressively strong here...
The price of platinum has doubled in 18 months...
Futures market or in the physical bars or rounds available through the best source I know - the Canadian Mint.
Futuresjackal
how do you invest in Platinum?
tia
mlkr
Yep, wowzerz!!! Weekly chart looks solid.
No other way to describe this ride from under 800 to 1400+... WOWZERZ!!!
Platinum is on a real ride right now and for the foreseeable future.
For now, 1300 is tough resistance...
Platinum has had a severe downturn due to
oil retracing downward, along with
projections of decreased platinum industrial demand.
Chartwise, it might be ripe for a short-term bounce now that it's piercing the lower Bollinger Band.
Longer term, I dunno, except I believe the 200 MA would provide some decent support.
The weekly chart is really strong... onward...
Still holding 1100+/oz. Hmmm... inflation at work!
Yep, and now Platinum passes 1200/oz in the spot market -
Has anybody noticed the Gold/Platinum spread?
Platinum has fallen below gold, & historically that has been a no-lose time to swap gold for platinum, except that there's no platinum out there to swap for.
Excerpted from:
Franklin Sanders
The MoneyChanger
http://www.the-moneychanger.com
Starting this has been my pleasure and I want to build it far better than it's present form.
I would like to share some comments I made on Charts are Cooool forum - here are the links -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33109765
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33109878
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33109895
I hope this is found to be useful as it may apply to platinum.
demand for platinum products will likely suffer as worldwide economic downturn continues. Traders margin calls from sinking stocks compel them to sell assets, including precious metals, to raise cash to cover.
I'm reeeeeal tempted to grab a little platinum here, but I'll be cautious and wait a bit.
Glad I stumbled onto your brand new board...thanks for starting it up.
~ Hope and Hype are your enemies - trade the charts! ~
Platinum has taken quite a beatdown but it will come back in our inflationary environment.
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http://www.unctad.org/infocomm/anglais/platinum/characteristics.htm
Characteristics
Commodity
Description/Technical Characteristics
Origin and history
Platinum is considered as one of the most precious metals. In nature it is generally found as part of the so-called Platinum Group Metals (PGMs) and together with other metals such as gold, nickel or copper. The PGMs are Platinum (Pt), Palladium (Pd), Rhodium (Rh), Ruthenium (Ru), Iridium (Ir) and Osmium (Os). Platinum and Palladium are the most important of the PGMs.
Platinum is a rare, scarce and costly metal and it shows certain properties which make it unique. The specific chemical and physical properties of this metal are of essential use for many different applications. Platinum is known as the environmental metal. As a matter of fact, approximately 20% of the goods manufactured in the world contain platinum or are produced using platinum.
Description/Technical Characteristics
Platinum is one of the densest and heaviest metals, highly malleable, soft and ductile. It is extremely resistant to oxidation and to corrosion of high temperatures or chemical elements as well as a very good conductor of electricity and a powerful catalyzing agent. Platinum is soluble only in aqua regia. This precious metal has silvery-white color and does not tarnish.
Although platinum is regarded as a "new" metal in its present form, it has a long history. Ancient Egyptians and Pre-Columbian Indian civilizations already valued it as a very important element. The "modern" discovery of platinum is attributed to Spanish conquerors in the 17th century. Actually the name platinum was given by the Spanish word, platina, meaning little silver. Spaniards had discovered alluvial deposits of the rare white metal when they were mining in search for gold in the Choco region in Colombia. Paradoxically, they considered platinum as a nuisance for their mining of gold.
After the introduction of platinum into Europe in the 18th century it became a metal of interest for scientists due to its special properties. In 1751, a Swedish assayer, Scheffer, recognized platinum as the seventh existing element at that time. The French physicist P.F. Chabaneau first obtained malleable platinum in 1789 in order to produce a chalice presented to Pius VI. It seems that the British chemist W. H. Wollaston was the first person to obtain a sample of pure platinum in the early 1800s. The techniques used by Wollaston in the separation of PGMs are considered to be the basis for modern platinum metallurgy.
The production of platinum requires very complex processing techniques that were not available until the end of the 19th century. Moreover, the high melting points of platinum made it very difficult to work with it. It was only with the development of new refining techniques that platinum was more widely used for new industrial applications. On the other hand, the use of platinum in fine jewelry rose quickly in the beginning of the 20th century. Platinum was already highly appreciated for its beauty and durability.
During World War II the availability of platinum was limited since it was declared as a strategic material. Use of platinum for most non-military applications was prohibited. After the war, consumption of platinum increased due to its catalytic properties. This increase in demand followed the development of molecular conversion techniques in the refining of petroleum. In the 1970s this demand grew even more thanks to the introduction of automotive emission standards in the developed countries.
One of the most important obstacles for a more widespread use of platinum in its history has been its limited supply. At present time, deposits of platinum are concentrated in a few areas in the world, mainly in South Africa and the Russian Federation. However, in the last few decades new mines have been opened and sophisticated platinum mining techniques have been developed. Platinum has become a metal of great importance in the world and prospects for this metal are very positive.
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