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2010 to spell boom for platinum

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    2010 to spell boom for platinum


    December 31, 2009 15:00:00 IST




    LONDON (Commodity Online): What is in store for platinum in the coming year? If indications available in the global market are anything to go by, platinum is all set to beat almost all other metals and will ride the wave of increasing demand from the auto sector in 2010.

    In the meantime, platinum companies share prices continued to reflect uncertainty because of a fall in demand in 2009. But things are looking up for all those platinum makers in 2010. Eastplats is back to 670c from a low of 210c a year ago but well below the R30 of March 2008, while Lonmin , at R229, is less than half its R600 level of mid- 2007. But they are set to scale new heights in the coming months.

    There has been an 83% improvement in the platinum price since late last year. At 1464/oz this week, it may hit 1550/oz within a six-month period.

    Fundamentals for platinum are improving. Worlds newly developed and emerging economies are growing their auto sectors at an unprecedented pace. Over 50% of the demand for platinum is estimated to be in the automotive sector. For example, tae the case of India. Car sales in India zoomed in late 2009 even though the developed world developed cold feet following recession.

    Again, China is expected to become the largest auto market this year. Auto sales are likely to jump 35% this year and 20% on average from 2010 to 2014 I China.

    Interest in precious metals, including platinum, as an investment had never been higher. Interest and demand growth for platinum will continue over the next year. As a result, many investment funds and individual investors will be looking to platinum as an alternative to conventional gold equity investments.

    Adding fuel to the boom talks is Anglo Platinum, the platinum sectors giant. The company is the subject of speculation that parent Anglo American could seek to raise its stake which has been edging up slowly over several years to 100%.
 
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