A senior figure at Johnson Matthey has explained today (6th October) that the ongoing effects of the global economic crisis are now impacting on the platinum market.

He indicated that demand for the metal is set to be higher than supply again in 2008 after moving into a deficit of 480,000 oz in 2007 from a surplus of 335,000 oz in 2006.

But the company's Director of Precious Metals Marketing Mark Bedford warned that the dynamic is being influenced to such an extent that some mining projects may suffer.

Speaking at the Third International Platinum Conference in South Africa, he commented: "Supply should still rise in the medium term, but it is obvious to say that the low prices we are seeing will jeopardise the pace and the longevity of projects."

Mines have been struggling to achieve optimum output since January's Eskom power crisis in South Africa, where 80 per cent of the world's platinum is produced.

However, Mr Bedford also explained that the automotive industry - which accounts for half of global annual demand for platinum - will be under the most pressure in the current landscape.

Even the BRIC (Brazil, Russia, India and China) automarkets, which industry figures were hoping would be immune to the economic woes, are showing signs of vulnerability.

Despite this, Mr Bedford concluded by affirming that the long-term prospects for platinum ook healthy with sales of cars and jewellery for support.



Source:

Recession hits platinum (06/10/08)
http://business.iafrica.com/news/1211901.htm