Last Updated : May 18, 2011 08:53
Standard looks for $1,900 platinum, $950 palladium in fourth quarter
By Allen Sykora Standard Bank still looks for
Platinum to hit $1,900 and
Palladium to hit $950 in the fourth quarter, and the bank says costs to producers are among of the key factors for the market.
While platinum and palladium are higher in dollar terms over the last year, palladium is up at a smaller percentage in South African rand (ZAR) terms, while platinum is 4% lower, Standard says.
Meanwhile, wage inflation in South Africa is up 8%-9%,
Electricity costs are up 25%, fuel inflation is up 18% and headline inflation is up 4.2%. “Clearly, PGM production costs in South Africa have risen faster than ZAR-based revenue,” Standard says.
The market could pull back before hitting the marginal cost of production. However, underinvestment in the South African PGM sector is likely to persist, Standard says.
The bank looks for the
Platinum and
Palladium markets to be in deficits of 154,000 ounces and 1.6 million ounces, respectively, in 2011, including investment demand. It looks for deficits of 35,000 and 2.5 million in 2012.
By Allen Sykora of Kitco News; asykora@kitco.com
NCDEX RAPEMUSTARDSEEDJUN12 20 June 2012
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