I listened to a half hour presentation by the CEO of Aquarius Platinum dated 2/24/09. I learned a few key things.
- At $1,000 per ounce, platinum miners are struggling, cutting back production, and laying off staff. At least in South Africa, platinum must be very expensive to mine and produce.
- The two primary "drivers" of the platinum market are its use in emission control devices in vehicles and jewelry. In particular, Chinese women have a strong fondness for platinum. My heart skips a beat when I hear what Chinese consumers favor.
- The speaker implied a fairly limited demand for investment purposes, noting ETF purchases as having a potential future impact on platinum pricing, but not now.
The eventual rebound in the auto industry, demand from Chinese consumers, the likely uptick in investor demand, combined with the inherent scarcity of the metal and its high cost of production, make for a very attractive investment in the physical metal.