Platinum Stockpiles Hold Prices Steady as Strike Continues

Reuters reported today that at $1,412 an ounce, platinum prices are still lower than at the start of January when the white metal was priced at $1,452 an ounce. According to Reuters, platinum prices have been supported in part by ample stocks that were shored up before the almost four month long South African miner strike began.

As quoted in the market news:

Under normal circumstances, such an outage might have been expected to drive prices of the metal higher. However, platinum , which is used chiefly in jewellery and as a catalyst in vehicle exhausts, remains stubbornly lower, at $1,412 an ounce, than on the first day of the strike, when it fetched $1,452/oz. Analysts put it partly down to the availability of above-ground stocks of the metal, which Citigroup estimated at 9 million ounces ahead of the strike, nearly a year’s demand.

Macquarie analyst Matthew Turner told Reuters:

There’s a difference between the mining companies and car companies, whose stockpiles are precisely there to be used up at times of shortage, and investors, who have to be persuaded to part with their holdings via a higher price. The fact that the price hasn’t responded suggests to me that it is those mining company and car company stocks that are being used up at the moment. That’s why the strike hasn’t had an impact.

Click here to read the full Reuters article.