Commodity Online
Fixing in London on 14th April at $1,222/oz, platinum was at its highest price since September 2008. But news of the impending bankruptcy of the Chrysler car company punctured sentiment, and by 1st May it had fallen back to $1,076/oz, its lowest since mid-March, says a report from Fortis Metals Monthly.

Further optimism in other commodity markets and marketing equities saw it rally again to $1,161/oz by 7th May, before easing back to $1,116/oz by 15th May. Until the Chrysler news became known platinum had been trading positively, much in line with the base metal complex.

Looking at car sales in Europe, the German new car incentives continue to bolster the market. Sales in April were 379,650 units, up 19% year-on-year, and while this does not compare to March's 40% year-on-year gain, such comparisons are volatile as they depend on the base level.

For example, if one compares German April and March 2009 sales to the same months in 2007 then April 2009 sales were 43% higher and March 2009 sales were a smaller 20%.

Elsewhere a similar trend can be observed. In France car sales were down 7% year-on-year in April compared to a 5% rise in March, and down 8% in Italy, compared to unchanged in March. However again comparing the 2009 figures
with the same month of 2007 April's data shows in all cases a better month than March. In short we would say the figures are gloomy but show signs of stabilising.

Investors seemed to have taken profits in early May, with the UK platinum ETF seeing its holdings fall from a peak of 351,180 oz on 29th April (its highest since August 2008) to 272,404 oz by 16th May, a decline of nearly 80,000 oz.

Platinum Outlook
Platinum rallied on the growing optimism about a stronger than seemed possible global economic recovery. There seem to be two problems with this: what if there is not such a vigorous global recovery? And even if there is, will it necessarily see car sales rise, given consumer anxieties? We see lower prices ahead.

Some News Reports on Platinum:
May 5th: Xstrata produced 32,985 oz of platinum in Q1 2009, up 18% on Q1 2008. 

May 1st: Norilsk Nickel, the world’s largest palladium miner, reported higher platinum production in Q1 2009 than a year earlier, up 2.2% at 141,000 oz. 

Apr 30th: The largest platinum producer, Anglo Platinum, saw in Q1 2009 output of 404,000 oz, a decline of 5.7% compared with Q1 2008, despite that quarter being affected severely by the South African power shortage crisis (it was 24% lower than Q1 2007). Furthermore, Q1 2009 was 52% lower than the Q4 2008 figure, with the explanation being the closure of two smelters for
maintenance purposes.

Courtesy: Fortis Metals Monthly 

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