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"In our view, given the presence of the AMCU at the negotiation table for the first time, coupled with the violent response seen last year (which resulted in the amendment of a number of 2011 agreements), platinum pri..

09 Jun 2013

LONDON (Commodity Online): London based Barclays believes that with supply concerns dominating the market sentiments in platinum, it could be that the commodity “has the most upside potential in the next few months across the precious metals complex.”

Last week on Monday, an employee of Lonmin working at the Marikana Mines in South Africa was killed and another one injured in a shooting episode. Treasurer at Association of Mineworkers and Construction Union (AMCU) has threatened a strike unless the union is approved as the ‘majority union’ by authorities. Tuesday had seen 3000 workers from Impala Platinum’s Rustenberg Mines go on a strike only to return to work overnight.

The snapshots provided above forms a collage of the plight of platinum supply as far as South Africa is concerned.

“South African producers have already been facing cost and wage pressures with current platinum prices eating into the cost curve,” Barclays noted in a report.

No wonder the outlook is bullish for platinum.

The Impala mines had been accounted for 628koz and 930koz of platinum production in 2012 and 2011.

“In our view, given the presence of the AMCU at the negotiation table for the first time, coupled with the violent response seen last year (which resulted in the amendment of a number of 2011 agreements), platinum prices are the most exposed to upside risk in the months ahead,” concluded the report from Barclays on Saturday.

Friday had seen platinum for delivery on July 13 on the Comex closing at $1,500.15/oz, registering a loss of $29.15 or 1.91% as Dollar strengthened and gold dipped on US job data. 


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COMMENTS (1)
Charles
14 Jun 2013
The labor disputes in Africa will certainly have ramifications on the precious metals market. Of recent, the returns on platinum have been very impressive when compared with other precious metals, like gold and silver. In my opinion, even palladium is yet another precious metal that has an upside potential.
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