Platinum Comfortably Above $2,000/Ounce Despite Macro Concerns

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The Fortis metals monthly says the outlook for platinum is comfortably above $2,000/ounce on new investment demand, higher capital costs stemming from power generators and a looming Cosatu strike in South Africa.

The Fortis metals monthly says the outlook for platinum is comfortably above $2,000/ounce on new investment demand, higher capital costs stemming from power generators and a looming Cosatu strike in South Africa.

The Fortis/VM Group said in its monthly metals report more mining companies were likely to follow Eastern Platinum in installing their own diesel power generators that will add to their capital costs and could involve "new problems" given the high cost of crude oil.

Another factor that could support the platinum price in the near term is the fact that South Africa's umbrella trade union Cosatu has called for a general strike on 6 August to protest against job cuts linked to the power crisis in the country...

Fortis said supply-side concerns stemming from South Africa's power situation have taken a back seat amidst macro economic concerns, but they have not disappeared. If a power supply crunch is averted in August, the medium term outlook still appears grim.

Taking a longer view, platinum will continue to remain well supported for the rest of the year due to the ongoing difficulties facing PGM producers in South Africa.

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