(recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, Feb 20 (Reuters) - Platinum ended its record-setting
streak after 14 straight days on Wednesday after profit-takers
stepped in, but it is likely to recover after a breather because
of persistent supply problems, analysts said.
The metal fell more than 3 percent, after surging 43 percent
in less than a month on worries the market deficit will sharply
widen this year following output losses in top producer South
Africa due to an electricity supply crisis.
Platinum <XPT=> fell to $2,072 and was at $2,077/2,087 an
ounce at 1117 GMT, against New York's close of $2,140/2,150 on
Tuesday, when it hit a record high of $2,160.
Palladium rose to a 6-1/2-year high before falling, while
gold gave up gains as oil slipped from record highs above $100 a
barrel.
"The platinum market is down on profit-taking. We have had a
strong price rise in a very short period of time, so if you have
a phase of consolidation coming through, that will not surprise
me," said Michael Widmer, metals analyst at Lehman Brothers.
"But I still think that we are going to go higher. The
demand-supply deficit will continue to support the market."
Platinum surged this year after mines in South Africa, which
account for 80 percent of the world's supply, ground to a halt
for 5 days at the height of last month's power crisis.
The mines now get 90 percent of normal supply and analysts
said it would take years to normalise the situation.
The world's No. 1 platinum miner Anglo Platinum has said
power problems would cut output by 120,000 ounces in 2008, while
Impala Platinum, the world's No. 2 producer, forecast "very
tight market conditions."
Analysts say the global platinum deficit could widen to
500,000 to 600,000 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.
"We continue to recommend investors (to) look to hold onto
their core long positions in platinum and would 'bang the table'
to buy a lot more below $1,900/oz," UBS Investment Bank said.
"Nimble traders could try and trade around this position,
but there are clear risks that selling into what might look like
a short-term top may mean never getting back into this trade,"
it said in a client note.
TOKYO TO RAISE MARGINS
Platinum slipped in other markets also. The December 2008
contract <0#JPL:> on the Tokyo Commodity Exchange ended 175 yen
per gram lower at 6,965 an ounce. It briefly hit a new record of
7,207 yen before tumbling to a low of 6,901 yen.
Analysts said the exchange's plan to raise margins triggered
profit-taking in Asia. It will raise the level by 50,000 yen per
platinum contract for all new and existing positions from
Thursday until the end of the month to cope with volatility.
In other metals, gold <XAU=> fell to $924.70/925.60 an ounce
after a high of $929.50, against $927.00/927.80 in New York.
The metal came under pressure because of oil prices, which
retreated after hitting a record high above $100 a barrel on
Tuesday, as investors focused on a U.S. inventory report
expected to show crude stockpiles rose for a sixth week.
But analysts said the metal was likely to set new highs.
"Having been through a period of consolidation, gold is now
extremely well placed to set a fresh record high as investors
continue to seek the metal's anti-inflationary and safe-haven
attributes," said James Moore, analyst at TheBullionDesk.com.
Silver <XAG=> edged up to $17.44/17.49 an ounce from
$17.36/17.41, while palladium <XPD=> rose up to $495 an ounce
before falling to $468/472 an ounce, versus $491.00/494.00.
(Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; editing by Peter Blackburn)
