(Updates with quotes, closing prices, adds NEW YORK to
dateline)
By Frank Tang and Atul Prakash
NEW YORK/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 the gains, with prices
<XPT=> falling to $1,997/2,007 an ounce at 3:32 p.m. EST (2032
GMT), after initially 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.
"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.
South Africa's state power firm Eskom said on Thursday it
would increase coal purchases and buy back electricity from
those industrial users able to reduce consumption under a plan
to address crippling shortages. []
Since early January, South Africa has been hit hard by
power cuts that forced mines to shut for five days last month.
"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
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
Anglo Platinum <AMSJ.J>, the world's top producer, No. 2
Impala Platinum <IMPJ.J>, as well as other miners, said they
were lowering their output forecasts due to the power crisis.
Analysts noted strong interest in platinum's exchange
traded fund, 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
(million) to 2 million ounces of platinum bullion we believe to
be in stocks," said Robin Bhar, an 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 $907.10/907.90 an
ounce by New York's last quote at 2:15 p.m. (1915 GMT), from
$906.70/907.50 in New York.
The gold contract for April delivery at the COMEX division
of the New York Mercantile Exchange <GCJ8> edged up 60 cents to
finish at $910.80 an ounce, as sharply higher crude oil prices
help bullion to erase initial losses.
"Inflation is not going away. It seems as though the Fed is
content with letting inflation domestically run its course in
order to protect the banking sector and lift the housing market
a bit," Rob Kurzatkowski, futures analyst with optionsXpress in
Chicago, said.
Palladium <XPD=> rose to $433/437 an ounce from its
Wednesday close of $430/435, while silver <XAG=> edged up to
$17.24/17.29 an ounce from $17.28/17.33.
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Walter Bagley)
