Platinum price at six-year low
Johannesburg-South Africa (Aug 6) The spot price of platinum was slightly higher at midday on Thursday, but remained at a six-year low.
Broad weakness in precious metals, particularly gold, has arisen from the fear of an impending US interest rate hike, which has seen the dollar strengthen substantially. Worry about demand in China has allowed bearish traders to push the metal lower.
Investors say they are falling out of love with platinum, as low prices put pressure on producers.
"The situation is critical, and only getting worse," Sprott chairman Rick Rule said. The company oversees almost $5bn in mining stocks and metals.
Platinum and palladium fell sharply in the second quarter of this year, dropping 5.5% and 8.5%, respectively. So far this year, platinum is down 11% and palladium has given up 15%.
Platinum group metals are mainly used in vehicle parts designed to reduce air pollution.
At 12pm, the platinum spot price was $953.78/oz, from a close of $948.80 on Wednesday. This marked the first rise in the price after five consecutive days of declines.
Despite this gain the platinum index on the JSE was down 1.37% at the same time. Shares in the world’s third-largest platinum producer, Lonmin, did not take heart from the rise in the spot price, and were down 7.05% to R8.31.
SA is the world’s largest platinum producer, accounting for about 80% of global supply.