South Africa mine battles put floor under shaky platinum price

Platinum is now trading up nearly 9 per cent so far this year at $1,514 an ounce, compared with a 3 percent rise in gold. Prior to the Lonmin clashes, it had been below $1,400 an ounce, close to its lowest this year.The metal fell more than 20 percent in 2011 as the European debt crisis strangled consumer spending and demand for motor vehicles, in which it is used in the catalytic converters that clean exhaust emissions.The European car market favours diesel vehicles, which use a higher loading of platinum than petrol engines preferred elsewhere.Analysts in Europe are forecasting a surplus this year of anywhere between 100,000 and 400,000 ounces, largely because of flagging European car buying. Europes automakers accounted for more than 1 million ounces of demand last year.The weight of surplus metal has not been lost on investors in U.S. platinum futures, who have so far this year driven bearish bets against their price to record highs, according to data from the Commodity Futures Trading Commission.The poor demand picture has offset other bad news from South Africa this year, including a strike at Impala Platinum and supply cuts from Aquarius Platinum this year.As soon as you have anything bad coming out of Europe as regards the economic outlook, that can negate whatever South Africa put out with regards to supply scare, Neal Meader, research director for precious metals at GFMS, said.Agencies

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South Africa mine battles put floor under shaky platinum price