Platinum Hits Record on Supply Concerns
By STEVENSON JACOBS
The Associated Press
Monday, February 4, 2008; 4:25 PM
NEW YORK -- Platinum soared above $1,800 an ounce for the first time Monday as investors bet that a power shortage in South Africa will tighten global supply for the metal used in jewelry and automobiles.
Other precious metals traded mixed, with gold and silver falling sharply and copper edging higher. Crude oil rebounded on positive U.S. economic data, while agriculture futures also rose.
Several major South African mining companies have been operating below capacity since last week amid a national electricity crisis that has crippled the vital mining industry and sent commodities prices soaring. Mines received an increase in power Friday but the ongoing blackouts have fed concerns of a protracted mining disruption.
"Mine output disruptions continue to fuel the rally" in platinum, Jon Nadler, senior analyst for Kitco Bullion Dealers Montreal said in a research note. "With 80 percent or so of global supplies coming from the very mines affected by electricity woes, this is not a surprise."
Platinum for April delivery jumped $27.40 to settle at $1,797.60 an ounce on the New York Mercantile Exchange, after earlier reaching an all-time high of $1,803.80 an ounce. The metal also hit record-highs on Thursday and Friday, and has increased in value by nearly 20 percent this year.
South Africa is the world's top producer of platinum and second only to China in gold production. Mine equipment problems, accidents and maintenance have contributed to a production decline this year, however.
Platinum prices have roughly doubled in four years, with global inventories growing tighter as automakers try to meet demand, particularly in Asia and Eastern Europe. Demand for the metal, used in jewelry and catalytic converters in automotive exhaust systems, has also surged due to stricter emissions standards.
In other precious metals trading, gold fell to a two-week low on profit-taking.
Gold for April delivery lost $4.10 to settle at $909.40 an ounce on the Nymex. Gold earlier fell to $896 an ounce, it's lowest since Jan. 24.
March silver dipped 9 cents to settle at $16.780 an ounce, while March copper gained 2.55 cents to settle at $3.2985 a pound.
