(Updates with quotes and prices)
By Atul Prakash
LONDON, Feb 14 (Reuters) - Platinum hit a record high for
the 11th straight day on Thursday as a deepening power crisis in
top producer South Africa forced another miner to forecast lower
output and prompted investors to snap up the metal.
But profit-taking later trimmed gains, with prices <XPT=>
falling to $1,997/2,007 an ounce at 1622 GMT after hitting
$2,025, against $1,985/1,995 in New York on Wednesday.
Platinum has gained 32 percent this year after surging 37
percent in 2007.
The power crisis in South Africa, which accounts for 80
percent of global platinum output, continued to affect mining
operations. Mines were shut for five days in late January and
are now getting only 90 percent of normal electricity supply.
"Definitely the situation is serious and this is getting
reflected in the price. We will have shortages this year and
probably the next year," said Frederic Panizzutti, precious
metals analyst at MKS Finance.
"The supply-demand balance was already extremely tight. What
has happened recently and what is going to happen for the next
two to three years are definitely going to widen the gap and
additional shortages are going to tighten the market further."
South Africa's state power firm Eskom said it would increase
coal purchases and buy back electricity from those industrial
users able to reduce consumption. []
"Sellers are nowhere to be found, so the price top is hard
to pick," said David Thurtell, metals analyst at BNP Paribas.
"Market risk is that Eskom agrees to sacrifice a significant
amount of South African aluminium production for reliable and
full supply of electricity to other consumers such as platinum
producers. That could see some spec profit-taking."
Aluminium rose nearly 6 percent to its highest since July
2007 at the London Metal Exchange, driven by fears of reduced
supply owing to power shortages in South Africa and China.
Analysts say the platinum deficit could widen to more than
400,000 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.
LOWER OUTPUT FORECAST
Impala Platinum <IMPJ.J>, the world's second biggest
platinum producer, said its output in the full year to end-June
would decline to just under 2 million ounces, compared to 2.026
million ounces in 2007, due to the power crisis. []
Other producers have also lowered forecasts. Anglo Platinum
<AMSJ.J>, the world's top producer, said this week electricity
problem alone would cut output by 120,000 ounces in 2008, and
had cost 30,000 ounces in lost output since January.
Production at South Africa's Northam Platinum <NHMJ.J> fell
16.5 percent to 150,755 ounces during the first half from July
to December. For the second half to end-June, it said production
would match the first half if the electricity crisis restricted
the company to continue using 90 percent of normal power.
Analysts noted strong interest in platinum's exchange traded
fund (ETF), with the metal held by London-based ETF Securities
rising by 42,000 ounces in a week to 267,000 ounces now.
"The ETFs are now tying up a substantial amount of physical
platinum and this represents a large proportion of the 1 to 2
million ounces of platinum bullion we believe to be in stocks,"
said Robin Bhar, analyst at UBS Investment bank.
"If growth continues at half of this recent rate then the
ETF will hit a million ounces in the fourth quarter of 2008,
although we would expect a physical squeeze to develop before
then," he said.
In other metals, spot gold <XAU=> rose to $908.60/909.50 an
ounce from $906.70/907.50 in New York. Palladium <XPD=> rose to
$435/439 an ounce from $430/435, while silver <XAG=> edged up to
$17.30/17.35 an ounce from $17.28/17.33 in New York.
(Additional reporting by Lewa Pardomuan in Singapore)
(Editing by Peter Blackburn)
