Platinum News : Strikes in South Africa rattle supply
-Platinum at Ten Month High-
Platinum has neared a 10-month high on Tuesday, as platinum for October delivery (the most actively traded contract) closed at $US1,515.00 for a troy ounce on the NYMEX. Despite the end of South Africa’s mining strike, worries about the platinum supply remain. The strike, which started on January 23rd, has been going on for the last 5 months and has affected 66% of the industry’s miners. Considering that South Africa supplies around 80% of the world’s platinum, the strike left the market in a vulnerable position.
However, the demand for platinum stayed strong throughout the strike. As one of its primary uses is in the production of automobile-exhaust filters, strong auto sales in Europe, North America, and China helped maintain a steady demand for the metal.
This past Monday, prices fell briefly before climbing above their previous levels on Tuesday. However, analysts had been anticipating the end of the strike and had prepared accordingly. Furthermore, the end of the strike does not necessarily mean that the platinum supply will increase to its previous levels. According to J.P Morgan analysts, “6% of the striking workforce will not return to work” and other sources are indicating that it could be 3 months before the mines are back at a full production level.
In addition, reports are claiming that a second strike could further debilitate the platinum industry. 250,000 metal workers and engineers are preparing to strike went on strike last Tuesday and will continue their strike until management awards them a 12% wage increase.
All things considered, many analysts are pessimistic about the near future for platinum. I Know First’s algorithm is one of the most trusted and reliable prediction services for commodities like Platinum.
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