(Updates with New York closing prices, market activity)
By Atul Prakash
LONDON, Feb 11 (Reuters) - Platinum hit a record high for
the eighth straight trading day on Monday, inching closer to
the psychological $2,000 milestone, as South Africa's power
crisis took its toll on output in the top global producer.
Anglo Platinum <AMSJ.J>, the world's top platinum miner,
said full-year earnings per share fell and it cut its 2008
production forecast mainly due to the power crisis that has
left miners operating in a reduced capacity.
Angloplat's 2007 production and refined platinum ounces
fell by 6 and 12 percent, respectively, to 2.47 million ounces,
mainly because of safety-related shutdowns, and it again
revised down its 2008 output forecast to 2.4 million ounces.
[]
With the global platinum market already seen in a supply
deficit this year, Angloplat's forecasts heaped further upward
pressure on prices.
"This is a big big shock," said Stephen Briggs, economist
at SG Corporate and Investment Banking.
"Angloplat indicated that it's going to produce less than
last year and this is from a company and from an industry that
had several expansion programmes in place," he said.
Spot platinum <XPT=> hit a record $1,934 an ounce and was
quoted at $1,933/1,941, against $1,880/1,888 late in New York
on Friday.
The U.S. NYMEX platinum contract for April delivery <PLJ8>
settled up $55.40, or 2.9 percent, at $1,939.40 an ounce.
Platinum, used in jewellery and autocatalysts, has risen 25
percent so far this year, on the top of 37 percent gains in
2007, after power shortages disrupted mining in South Africa,
triggering worries about a bigger market deficit for 2008.
Negotiations were underway for South African state-owned
power utility Eskom to buy surplus electricity from local
producers as part of its bid to solve the nation's energy
crisis, Public Enterprises Minister Alec Erwin said.
"Optimists bank on the creativity of the South African
mining industry to come up with innovative solutions to prevent
the worst possible outcome, but this is a high mountain to
climb," Craton Capital, a Europe-based fund, said in a report.
"They could come at substantial higher operational costs."
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.
"The situation is pretty serious. In the last three weeks,
there has been significant production loss of the metal in
South Africa," said Tom Kendall, precious metals strategist at
Mitsubishi Corp.
"Eskom says that they are addressing the problem and the
government also says it's trying to resolve the issues, but
there are no quick-fix solutions."
GOLD FIRM
Other precious metals firmed in platinum's wake, with gold
rising as much as 1 percent to near its recent record of
$936.50 an ounce, silver hitting a 27-year high and palladium
rising to its highest level in more than six years.
Dealers said uncertainties in the dollar's outlook amid
global turmoil in credit markets had also encouraged investors
to buy precious metals.
Gold <XAU=> rose to $926.90 and was at $922.70/923.40 by
New York's last quote by 2:15 p.m. EST (1915 GMT), versus
$918.00/918.70 late in New York on Friday. U.S. April gold
futures <GCJ8> for April delivery <GCJ8> finished up $4.40 at
$926.70 an ounce amid light volume,.
Investors kept an eye on the euro, which edged up against
the dollar after tough talk from monetary policy-makers dented
expectations for lower euro-zone interest rates.
Gold often moves in the opposite direction of the dollar.
"IMF gold sales may lead to some near-term profit taking,
but professional traders will be cautious in establishing short
positions following repeated failed attempts to play
corrections in gold of late," UBS Investment Bank said in a
client note.
The Group of Seven rich nations on Saturday approved the
sale of gold by the International Monetary Fund from April as
part of a broad reform of its budget, Italian Economy Minister
Tommaso Padoa-Schioppa said. []
Palladium <XPD=> rose to $437/440 an ounce from its Friday
finish of $436/441, while silver <XAG=> rose to a high of
$17.54 an ounce and was last quoted at $17.48/17.53, versus
$17.10/17.15, its late U.S. close on Friday.
(Additional reporting by Frank Tang in New York and Lewa
Pardomuan in Singapore; Editing by Christian Wiessner)
