Last Updated : 24 September 2009 at 11:20 IST

Platinum turns bullish on Swiss data

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LONDON (Commodity Online): The August Swiss PGM import/export data, released yesterday, was the first bullish customs report for platinum in more than eight months. The data shows that physical demand may be recovering, which should start to provide better support for platinum.

Price support comes not only from what could be recovering physical demand (evidenced by the Swiss figures) but also from a weaker dollar and stronger ZAR. One month of positive data is not a trend — but it is a positive development.

Swiss import/export data of PGM is important, as this country serves as physical hub for much of the PGM market. Switzerland was, for the first time since January, a net exporter of platinum in August; it imported 187K oz of platinum and exported 229K oz of platinum.

This is the lowest import figure in four months and highest export figure in five months. It is also a possible signal that demand is rising, while de-stocking could be slowing. The net export figure was 41,958oz of platinum in August. The main importers of the metal from Switzerland were the UK (82,500oz) and China via HK (92,000oz).

In August ETF Securities added 9,263oz of to their platinum ETF holdings. While this accounts for some of the Swiss exports to the UK, there is clearly larger demand elsewhere.

The main exporters of the metal to Switzerland remained the US (41,300oz) and Japan (32,000oz). China remains a large source of demand. South Africa exported substantially less than previous months to Switzerland. South African exports were 47,000oz (compared with 145K oz in Jul and 119K oz in June). This could partly be due to strike actions late in August, but also due to increased demand elsewhere.

We view this as the most bullish Swiss customs data for platinum this year. There are clear risks involved in higher prices, such as the net speculative length on NYMEX. However, this is a sign that the physical platinum market is recovering.

Courtesy: Commodities Research, Standard Bank