(Updates prices)
By Lewa Pardomuan
SINGAPORE, Feb 19 (Reuters) - Platinum roared to a 14th
straight record high on Tuesday, taking gains this year to over
40 percent as intensifying speculative buying extends a rally
triggered by supply problems in main producer South Africa.
Spot platinum <XPT=> hit a high of $2,140 an ounce, up 1.7
percent from $2,105/2,115 an ounce late in London on Monday.
Prices have soared from below $1,600 an ounce in
mid-January as platinum mines in South Africa, which accounts
for four-fifths of the world's supply, ground to a halt for
five days at the height of last month's power crisis.
The rally in platinum, used to clean auto exhaust fumes and
for jewellery, lifted sister metal palladium to its highest in
more than six years and inspired modest gains in gold, which
has fallen back after hitting a record high earlier this month.
"It's rising so fast. It's not healthy. It can't sustain
the high level if there's no real demand," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
Analysts say global platinum demand could outstrip supply
by 400,000 to 500,000 ounces in 2008, compared with a supply
shortfall of about 265,000 ounces in 2007. The market had a
surplus of 65,000 ounces in 2006, following seven successive
years of deficits.
Top producer Anglo Platinum <AMSJ.J>, which accounts for 40
percent of world supplies, has said power problems would cut
output by 120,000 ounces in 2008, while No. 2 Impala Platinum
<IMPJ.J> has forecast "very tight market conditions."
"Fresh funds are flowing into the platinum market. The
target can be, for a start, $2,200," said William Kwan, a
dealer at Phillip Futures in Singapore. "Basically, there are
no sellers in the market. Everyone is on a buying spree."
LEASE RATES STEADY
Traders pointed to lease rates -- the rate at which an
investor or trader borrows a metal -- as evidence that the
latest rally was driven more by speculation than a scramble for
supply.
Lease rates, which typically rise when there is a shortage
in the physical market as consumers seek to lock in supplies,
have been steady at 9 percent since January.
"The platinum market has already been worried about
supplies in South Africa and this power problem emerged to
trigger more buying because we all knew this won't be resolved
easily," said Hisaaki Tasaka, a market analyst at Ace Koeki in
Tokyo.
"But at the moment, we are not seeing an actual shortage in
supplies as lease rates have not surged," Tasaka said.
Demand for auto catalysts jumped 2.3 percent to 4,235,000
ounces in 2007, from 4,140,000 ounces in 2006, according to
refiner Johnson Matthey <JMAT.L>.
But demand from the jewellery sector slipped 1.5 percent to
1,595,000 ounces last year, from 1,620,000 ounces in 2006.
Japanese platinum futures also powered to record highs. The
most active December contract <0#JPL:> on the Tokyo Commodity
Exchange ended up by the daily 240 yen per gram limit at 7,140
yen.
Also, open interest on TOCOM platinum fell to the lowest in
about 22 years as investors cut positions to avoid sharp
volatility. []
Palladium <XPD=> hit a bid high of $480 an ounce, its
highest level in more than six years, tracking platinum. It was
quoted at $466/470 an ounce in London on Monday.
Gold <XAU=> rose to $911.30/912.20 an ounce from
$903.00/903.80 an ounce late in London as the dollar fell
against other other currencies, but off a record high of
$936.50 an ounce it hit in early February.
"I think it's still consolidating at $890 to $920 for a
while," said Leung of Lee Cheong Gold Dealers, adding that the
physical market saw some buying from jewellers in Thailand.
Silver <XAG=> edged up to $17.24/17.29 an ounce from
$17.00/17.05 an ounce.
Precious metals prices at 0838 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 911.50 6.20 +0.68 9.46
Spot Silver 17.23 0.15 +0.88 16.66
Spot Platinum 2136.00 36.00 +1.71 40.53
Spot Palladium 477.00 9.00 +1.92 29.62
TOCOM Gold 3180.00 17.00 +0.54 3.92
71060
TOCOM Platinum 7140.00 240.00 +3.48 33.73
60056
TOCOM Silver 601.80 5.00 +0.84 11.24
1012
TOCOM Palladium 1686.00 80.00 +4.98 24.80
14703
Euro/Dollar 1.4731
Dollar/Yen 107.84
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikafumi Hodo in Tokyo; Editing by
Jonathan Leff)
