(Updates prices, adds details)
By Lewa Pardomuan
SINGAPORE, Feb 19 (Reuters) - Platinum roared to a record
high for the 14th straight session on Tuesday, topping $2,100
an ounce on fears of tight supply, after power problems in main
producer South Africa disrupted mining.
Spot platinum <XPT=> hit a high of $2,124 an ounce, up from
$2,105/2,115 an ounce late in London on Monday. The metal has
gained more than 30 percent this year on speculative buying
ignited by worries of a widening supply and demand gap.
"We don't know when it's going to stop," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong. "But of
course it's rising so fast. It's not healthy. It can't sustain
the high level if there's no real demand," said Leung.
More than 60 percent of the world's platinum output is used
as catalyst in vehicles, helping to clean exhaust fumes. Nearly
25 percent goes to jewellery making.
Demand for auto catalysts jumped 2.3 percent to 4,235,000
ounces in 2007, from 4,140,000 ounces in 2006, according to
refiner Johnson Matthey <JMAT.L>.
But demand from the jewellery sector slipped 1.5 percent to
1,595,000 ounces last year, from 1,620,000 ounces in 2006.
WIDENING DEFICIT
Analysts say the global platinum deficit could widen to
400,000 to 500,000 ounces by the end of 2008, compared with
about 265,000 ounces in 2007. The market had a surplus of
65,000 ounces in 2006, following seven successive years of
deficits.
"Fresh funds are flowing into the platinum market. The
target can be, for a start, $2,200," said William Kwan, a
dealer at Phillip Futures in Singapore. "Basically, there are
no sellers in the market. Everyone is on a buying spree."
The world's No. 1 producer Anglo Platinum <AMSJ.J> has said
power problems would cut output by 120,000 ounces in 2008,
while Impala Platinum <IMPJ.J>, the world's No. 2 producer,
forecast "very tight market conditions."
Japanese platinum futures were also at record highs. The
most active December contract <0#JPL:> on the Tokyo Commodity
Exchange surged 164 yen per gram to 7,064 yen.
"The platinum market has already been worried about
supplies in South Africa and this power problem emerged to
trigger more buying because we all knew this won't be resolved
easily," said Hisaaki Tasaka, a market analyst at Ace Koeki in
Tokyo.
"But at the moment, we are not seeing an actual shortage in
supplies as lease rates have not surged," Tasaka said.
While speculative buying lifted prices, dealers said
platinum lease rates had been steady at 9 percent since
January.
Lease rates are the rate at which an investor or trader
borrows a metal. They usually rise when there is a shortage in
the physical market.
Also, open interest on TOCOM platinum fell to the lowest in
about 22 years as investors cut positions to avoid sharp
volatility. []
Palladium <XPD=> hit a bid high of $473 an ounce, its
highest level in more than six years, tracking platinum. It was
last quoted at $466/470 an ounce.
Gold <XAU=> rose to $907.50/908.30 an ounce from
$903.00/903.80 an ounce late in London, off a record high of
$936.50 an ounce it hit in early February.
"I think it's still consolidating at $890 to $920 for a
while," said Leung of Lee Cheong Gold Dealers, adding that the
physical market saw some buying from jewellers in Thailand.
Silver <XAG=> edged up to $17.13/17.18 an ounce from
$17.00/17.05 an ounce.
Precious metals prices at 0548 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 907.50 2.20 +0.24 8.98
Spot Silver 17.13 0.05 +0.29 15.98
Spot Platinum 2118.00 18.00 +0.86 39.34
Spot Palladium 473.00 5.00 +1.07 28.53
TOCOM Gold 3169.00 6.00 +0.19 3.56
40818
TOCOM Platinum 7060.00 160.00 +2.32 32.23
40985
TOCOM Silver 598.20 1.40 +0.23 10.57
703
TOCOM Palladium 1677.00 71.00 +4.42 24.13
12099
Euro/Dollar 1.4689
Dollar/Yen 107.85
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikafumi Hodo in Tokyo; Editing by
Sambit Mohanty)
