'Platinum to hit $1,700/Oz by the end of Qtr1'

NEW YORK (Oct 21)   Platinum prices to hit $1,700 an ounce by the end of first quarter of next year and palladium passing $850 an ounce, said TD Securities in a snippet.

According to TDS, this optimistic view is based on our expectation that the combination of investment and industrial demand will outweigh supply by a wide margin for both platinum and palladium next year,” TDS added.

But it may take a while before prices rally, as the market is still plagued (by) an overhang of industrial grade platinum and palladium. Economic data for China is becoming more positive, supporting usage in the auto-catalyst and jewelry sectors, TDS added.

US consumption is expected to be firm and there are signs of the auto market picking up in Europe. At the same time, there are a number of supply worries, including labor issues in South Africa and efforts to reduce nickel capacity, which would mean less PGMs since they are often a by-product of nickel mining, said TDS.

Many PGM producers are having difficulties covering cash costs, implying little new primary supply next year without higher prices, TDS continued.

The current prices represent a “buying opportunity” in platinum group metals, TDS also added.