(Updates with quotes, prices)
By Atul Prakash
LONDON, Feb 12 (Reuters) - Platinum prices hit a record high
for the ninth straight trading day on Tuesday as concerns
deepened over output losses in top producer South Africa due to
a power crisis, analysts said.
The rally, which has sent prices up 30 percent in just three
weeks, gained pace after Anglo Platinum <AMSJ.J>, the world's
biggest producer, said on Monday the power problem alone would
cut output by as much as 120,000 ounces in 2008. It had already
cost 30,000 ounces in lost output this year. []
Platinum <XPT=> rose to a high of $1,965 an ounce before
falling to $1,940/1,950 by 1304 GMT, against $1,933/1,941 in New
York late on Monday.
The market nervously awaited financial results of Northam
Platinum <NHMJ.J> on Tuesday and Impala Platinum <IMPJ.J>, the
world's second-biggest producer of the metal, on Thursday for
more cues on production losses.
"It's a chronic problem. It has been a deficit market for
many years and it looks like it has returned to a significant
deficit market again," said David Holmes, director of metals
sales at Dresdner Kleinwort Investment Bank.
"The market is really tight. The only way that the shortfall
can be made up is by a decline in industrial or jewellery
demand," he said, but added: "Jewellery demand is considered the
more price sensitive of the two."
Mines across South Africa, which accounts for four-fifths of
the world's supply of the metal, ground to a halt for five days
at the height of the power crisis last month. Platinum is used
in jewellery and auto catalysts to clean exhaust fumes.
Negotiations were under way 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 on Monday.
A spokesman at Eskom said the company was in discussions
with the government to ensure sufficient funding to meet its
expansion programme. []
"We still target $2,000 this week, and while a significant
retracement can't be ruled out, it hasn't paid to bet on one,"
said Robin Bhar, analyst at UBS Investment Bank.
WIDENING MARKET DEFICIT
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.
"Prices could still climb further as consumers worry about
securing supply and producers continue to struggle with
production in South Africa," Fairfax investment bank said.
"Unlike gold, the majority of platinum is consumed in
industrial applications e.g. auto catalysts, where there is
little alternative and so consumers must have the metal almost
regardless of price," it said in a client note.
Japanese platinum futures also hit a record high, with the
most active December 2008 contract <0#JPL:> ending by the daily
240 yen per gram limit at 6,383 yen.
Platinum's rally helped other metals, with palladium rising
to a six-year high before steadying, silver firming to a 27-year
peak and gold rising towards record highs before dipping.
Spot gold <XAU=> rose as high as $924.60 an ounce and was
last quoted at $914.90/915.80, against $922.70/923.40 in New
York and this month's record high of $936.50.
In industry news, South African gold output fell 4.1 percent
in December from the previous year, while total output in the
full year of 2007 was down 6.5 percent. []
Palladium <XPD=> hit a high of $447 an ounce, its highest
level since September 2001, before falling to New York's level
of $437/441. Silver <XAG=> jumped to $17.60 an ounce before
falling to $17.38/17.43, against $17.47/17.52 in New York.
(Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; editing by Chris Johnson)
