Platinum is in sight of last autumn's record peak of $1,390 an ounce and there is scope for the metal to rise considerably higher this year. In its recent annual survey of the platinum market, metals group Johnson Mathey said that higher investment demand, spurred by newly launched exchange traded funds, could wipe out this year's likely production surplus and propel prices past $1,400 an ounce. And last week a report from Morgan Stanley was even more upbeat.
As environmental standards rise, demand for platinum-based catalytic converters is increasing; autocatalyst demand (comprising over 50% of demand for the metal) is set to rise by 9.5% worldwide this year, and 25% in China. Production delays highlighted by recent updates from miners, plus probable strikes at two major South African producers in July when wage deals expire in late June, imply a supply deficit this year; the strikes "could be just the catalyst to spur investor interest in platinum ETFs".
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