There is a disparity between the low price of platinum and the global shortage of the precious metal according to Platinum Australia Ltd.

Over the past 4 months the price of platinum has fallen from its record of 2,301.50 per ounce to a current level of just under 1500 dollars an ounce Yes the platinum market is suffered a deficit of 500,000 ounces last year while there was a demand for seven million ounces.

Mr John Lewins, Managing Director of Platinum Australia Ltd, stated he predicted there would be a larger shortfall this year and power supply problems in the world’s richest platinum-producing nation, South Africa, was making it costly to mine the precious metal, constricting already tight supply, he said.
Significantly increased demand was expected from China in coming years and its industrial consumption of platinum lagged behind other nations, Mr Lewins also stated.

Platinum was a key, non-substitutable ingredient in catalytic converters, which were used as part of a car’s emissions control system, and more cars were taking to China’s roads, he said.

Mr Lewins stated also that the platinum market was in deficit but its price had been driven downwards largely by the poor economic sentiment in the US and weaker vehicle sales. “Latterly, weakness in Europe is being seen too and that relates to the autocatalyst issue.”

He said a catalytic converter in a diesel car comprised as much as 75 per cent platinum - a much higher proportion than in petrol cars, where palladium could be used as a platinum substitute.

Diesel vehicle sales were expected to rise thanks to their 30 to 40 per cent better fuel efficiency, he also stated.

“Last calendar year in China, the production of vehicles went up by 26 per cent - the fastest growing vehicle manufacturers in the world - but they are producing virtually no diesel light vehicles at the moment.

“This is projected to grow.” he went on. “They have introduced a clean air act in Beijing and Shanghai and are just about to introduce it to the rest of China this month, which means more catalytic converters.”

This entry was posted on Wednesday, August 13th, 2008 at 8:14 am.