Platinum

[benrodwell]

Hi There,
After all the hype last year about the world running out of commodities, the only one I can see at the moment that seems to have bottomed is platinum.
Has any one any views on the fundamentals driving this? It used to be that demand for Catalytic converters was so high - but now maybe not the case? Not sure what other drivers there are, any views?
Best ways to play this _ etfs or stocks (Aquarious?)
There must be some metals traders out there- threads here are very old, perhaps just a quiet bunch or all got burnt to a crisp last year?

Ben

 

[nortonrich]

I trade using CFDs in the ETC Physical Platinum on Igmarkets. It is $ denominated which is good if the $ weakens during 2009 which is what I expect I agree that platinum seems a good buy at the moment if you have a medium term horizon.

 

[benrodwell]

Hi nortonrich....
I guess the problem I percieve is that all the commodities look cheap to what they were... but platinum is the only one I can see that has made a positive move up, copper and industrials generally look to me to be merely pausing on their downward trend, I am wondering if the fundamentals here are somewhat different and looked at together with the technicals give us a decent entry point on 12 month plus timescales. I am just a bit concerned about the well touted bear rally into spring before the markets collapse again.

Oil seems to about to bounce and even if it declines again fundamentals look good over the longer term ie. we are going to run out of it sometime and the few global suppliers will restrict demand so it wont drop far for long; i wondered if similar situation exists for platinum?
Ben

 

[nortonrich]

Its not so much the supply of platinum drying up like Oilbut the costs of production for platinum which are a major consideration. When it was trading close to the price of gold i.e. $850 , at this level it is not economical in many cases to produce it. When this is the case production levels are reduced which causes the supply demand imbalance. Of course at the moment there is lack of demand especially due to the Auto industry. Supply will be reduced during 2009 as producers try to correct the price. Similar to crude in this respect. I was buying 1-2 weeks ago but will not be holding for the long term. Its a case of a short term trade as I believe the OBAMA effect rally will fail out. The S&P 500 has bounced back alarmingly since mid November based on trillions of dollars of bail outs and nothing more! I was bullish a month ago but now feeling nervous. Watch those poor Q4 earnings come in.

 

[metals_trader]

platinum as said the main use for it is in auto catalysts but its also used in

Jewelry – as a substitute for gold,
Chemical processing – also as a general catalyst
Electrical/electronics – for high-temperature and non-corrosive wires and contacts
Glass – dies and process technology
Petroleum refining – as a catalyst for crude oil cracking
Dental/Medical – equipment and reconstructive
Investment – bullion and coins

South africa is by far the biggest supplier and a lot of the problems last year with the lack of supply of platinum was the fact that eskom who are the mian eelectricty suppliers in south africa were not supplying the consistant electrical supply needed to mine platinum aswell as other precious metals, eskom have so far sorted these problems out and so far it seems that they are back to normal.