Investing in Platinum

Platinum is a precious metal with many uses. Because it is resistant to corrosion, it is often used in jewelry, and is more expensive than gold. The platinum group metals also have excellent catalytic properties, making them useful in automobile catalytic converters.

Domestic Production and Use: The Stillwater and East Boulder Mines in south-central Montana were the only primary platinum-group metals (PGMs) mines in the United States and were owned by one company. Small quantities of PGMs were also recovered as byproducts of copper refining. The leading demand sector for PGMs continued to be catalysts to decrease harmful emissions in both light- and heavy-duty vehicles. PGMs are also used in the chemical sector as catalysts for manufacturing bulk chemicals such as nitric acid and in the production of specialty silicones; in the petroleum refining sector; and in the fabrication of laboratory equipment. In the electronics sector, PGMs are used in computer hard disks, multilayer ceramic capacitors, and hybridized integrated circuits. PGMs are used by the glass manufacturing sector in the production of fiberglass, liquid crystal displays, and flat-panel displays. Platinum alloys, in cast or wrought form, are commonly used for jewelry. Platinum, palladium, and a variety of complex gold-silver-copper alloys are used as dental restorative materials. Platinum and palladium are used as investment tools in the form of exchange traded notes and exchange traded funds.

Recycling: An estimated 26,000 kilograms of PGMs was recovered from new and old scrap in 2010.

Import Sources (2006–09): Platinum: South Africa, 21%; Germany, 17%; United Kingdom, 9%; Canada, 4%; and other, 49%. Palladium: Russia, 44%; South Africa, 21%; United Kingdom, 17%; Belgium, 5%; and other, 13%.

Events, Trends, and Issues: Prices of platinum, palladium, and rhodium trended higher during the first quarter of 2010, decreased in the middle of the year, and increased once again toward yearend. The price of iridium increased strongly in the first few months and stayed at that high level throughout the rest of the year, its highest level since 1981. Ruthenium prices increased toward the middle of the year, then decreased.

The slowly recovering global economy in 2010, compared with the poor economic conditions of 2009 and late 2008, affected the PGM industry. Some mines that had been previously placed on care-and-maintenance status were reopened in response to higher metal prices. Production of and demand for automobiles was higher throughout much of the world, particularly in developing nations such as China and India. This led to increased PGM demand in some regions because catalytic converters are the major end use of PGMs. The proportion of diesel cars in Western Europe, which use platinum in their catalytic converters, returned to around 50% after having dipped to 42% in 2009 as a result of Government scrappage plans. Those plans had led to increased purchases of smaller, more fuel-efficient gasoline-powered cars.

Compared with consumption in 2009, consumption of PGMs for industrial uses in the chemical and petroleum sectors increased. In contrast, consumption in the jewelry sector was lower in 2010 as a result of higher prices. Consumption in the jewelry sector can be expected to follow price trends for platinum. The United Kingdom mandated the hallmarking of all palladium jewelry, and future jewelry use for palladium may increase as that metal becomes more recognized and desired.

An increase in car sales in Europe and North America can be expected to result in an increase in use of platinum and palladium in these regions. The large price differential between platinum and palladium has led to the assumption that automobile manufacturers will continue to change PGMs ratios in gasoline-engine vehicles in favor of palladium, as well as continue efforts to increase the proportion of palladium used in diesel vehicles. Research is likely to continue on fuel cells for automobiles, including research on the use of palladium rather than more expensive platinum in the catalysts. Investor interest in exchange-traded notes and funds is expected to continue to rise.

World Resources: World resources of PGMs in mineral concentrations that can be mined economically are estimated to total more than 100 million kilograms. The largest reserves are in the Bushveld Complex in South Africa.

Substitutes: Many motor vehicle manufacturers have substituted palladium for the more expensive platinum in gasoline-engine catalytic converters. Until recently, only platinum could be used in diesel catalytic converters; however, new technologies allow as much as 25% palladium to be used, and laboratory experiments have increased that proportion to around 50%. For other end uses, PGMs can be substituted for other PGMs, with some losses in efficiency.

Platinum Producers
Anglo American (NASDAQ: AAUK) - Their Anglo Platinum subsidiary is the world's largest platinum producer, accounting for nearly 40% of global supply. They also mine, process, refine and market the other platinum group metals which include palladium, rhodium, ruthenium, iridium and osmium.
Aquarius Platinum (ASX: AQP)
Bauba Platinum
Canadian Platinum Corp.
Impala Platinum (JNB: IMP) - - The second largest producer of platinum in the world.
Jubilee Platinum (LON: JLP)
Lonmin (LON: LMI) - South African platinum producer
Norilsk Nickel (OTC: NILSY) - - Platinum ingots and powder
North American Palladium (NYSE: PAL) -
Stillwater Mining (NYSE: PWC) -
Sylvania Platinum

Platinum price chart -

(wiki) - Platinum on Wikipedia

Platinum News
2011-07-24 - (sa) - Is platinum undervalued?
2011-07-22 - (msn) - Platinum a fine alternative to gold
2011-07-05 - (bl) - Lonmin considers building third furnace in effort to boost platinum target
2011-07-05 - (gam) - Precious platinum poised to shine
2011-07-04 - (prw) - Tetronics partners with solar industries to provide plasma plants for electrical waste refining
2011-06-29 - (mw) - World platinum supply threatened by SA, Zim policies
2011-06-29 - (mw) - Total refined platinum supply will hit 7.4m ounces in 2011-CPM Group
2011-06-28 - (mw) - Platinum jewellery demand set to surge in India
2011-06-28 - (ama) - The key differences between platinum, white gold and silver
2011-06-27 - (ri) - Platinum to gold ratio & detecting bubbles
2011-06-26 - (sa) - The platinum, palladium and gold ratio in focus
2011-06-21 - (sa) - Weakness in platinum may indicate imminently lower gold and silver prices
2011-06-17 - (mw) - Platinum explorers suffer from oversupply
2011-06-17 - (mw) - Suite of R46bn platinum projects on Bushveld’s western limb
2010-11-08 - (reu) - South African platinum producers
2010-11-01 - (fc) - How a handful of countries control the Earth's most precious materials
2010-03-01 - (wsj) - Fundamentals favor platinum and palladium

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