(Updates with quotes, prices)
By Atul Prakash
LONDON, Feb 18 (Reuters) - Platinum set a record high for
the 13th straight session on Monday on lingering power problems
in top producer South Africa that have hit mining and widened
the gap between demand and supply.
The metal, mainly used in autocatalysts and jewellery, has
jumped 22 percent this month, 38 percent so far in 2008 and
nearly 75 percent in the past 12 months on supply problems in
South Africa, which produces 80 percent of global platinum.
Spot platinum <XPT=> surged nearly 3 percent to a high of
$2,107 an ounce and was quoted at $2,105/2,115 at 1458 GMT,
against $2,050/2,055 in New York late on Friday.
"The supply tightness is likely to continue. One way to
alleviate that is by giving the miners sufficient energy so that
they could produce, but that doesn't seem to be happening," said
Michael Widmer, metals analyst at Lehman Brothers.
"The price rises will likely not be subsiding. The limit is
really when enough demand has been destroyed and enough new
supply has been coming online so that the market is balanced.
And that's going to take time," he said, adding prices could
easily rise to $2,500 in six months.
Mines across South Africa have been hit by a lack of power
after state utility Eskom [] asked the mining sector to
cut power use to 90 percent of normal needs to ease a nationwide
shortage caused by the failure of electricity generation to
match economic growth.
Analysts said the global platinum deficit could widen to
400,000 to 500,000 ounces by the end of 2008, from about 265,000
ounces in 2007. The market had a surplus of 65,000 ounces in
2006 following seven successive years of deficit.
"The pressure valve is fully open and the market is still
moving higher and that's quite a big concern," Ross Norman,
managing director of TheBullionDesk.com, said.
"What this does underscore is just how thin this market is
and that any kind of disruption can send it spiralling out of
control. Unlike most metals, there's little way of sorting this
out sensibly as there's no way of accelerating production.
"I can almost see this market going up to $3,000 per ounce
quite conceivably this year with what we've got going on at the
moment," Norman said.
RECORD HIGH IN OTHER MARKETS
Platinum set historic highs in other markets too, with the
most active December contract <0#JPL:> on the Tokyo Commodity
Exchange surging by the daily 240 yen limit to a record high of
6,945 yen per gram before ending at 6,900 yen, up 195 yen.
The Tokyo exchange imposed an additional margin of 60,000
yen per contract to all new positions built for platinum futures
contracts from Monday on top of the initial margins in an effort
to cool the market.
U.S. platinum futures <PLJ8> soared to a record high of
$2,124 an ounce in electronic trade before falling to $2,112,
still higher by $48.30 from its close on Friday.
But some analysts advised caution.
"This is a speculative bubble and it's not sustainable,"
said Wolfgang Wrzesniok-Rossbach, head of marketing at Heraeus,
a precious metals trading group in Germany.
"You can't ignore the underlying physical market. Higher
prices are already hitting jewellery business. Wherever this
rally stops, there is a big danger of a large fall from that
point onwards," he said.
In other precious metals, palladium jumped to a six-year
high of $465 an ounce, tracking platinum's rally. Spot metal
<XPD=> was last at $465/470 an ounce, up from $444/449 in New
York. Silver <XAG=> fell to $17.03/17.08 from $17.11/17.16.
Gold <XAU=> rose to a high of $909.25 before falling to
$904.10/904.80 an ounce, against $903.00/903.80 in New York.
U.S. April gold futures <GCJ8> gained $1 an ounce to $907.10.
The U.S. market is closed on Monday for the Presidents Day
Holiday.
(Additional reporting by Veronica Brown in London and Lewa
Pardomuan in Singapore)
(Reporting by Atul Prakash; editing by Editing by Peter
Blackburn)
