Platinum Production Falls as Japanese Auto Plants Close
Source: Platinum Today (3/15/11)
"The problem compounded by rolling black-outs to cope with nuclear power shortage."
The problem will be compounded by a series of rolling black-outs as electricity providers cut power to cope with the loss a number of nuclear plants.
Japan's largest carmaker Toyota initially shut two of its factories immediately after the earthquake.
It has now said all factories, including its subsidiary vehicle manufacturers, will be closed until March 16th.
According to Dow Jones, the shutdown will result in a production loss of 40,000 vehicles.
Meanwhile, the news provider reports that Honda will stop production at all of its Japanese factories until Friday (March 18th) with the loss of around 16,600 vehicles and 2,000 motorcycles.
Nissan has also closed several of its plants with a resulting drop in output expected.
Dow Jones reveals that platinum and palladium prices fell sharply as a result of the closures, noting that these metals are widely used in the automotive industry for catalytic converters.
It is thought that the drop in car production will only have a temporary effect on metal prices.
Standard Bank analyst Marc Ground is reported by the news agency as saying to clients: "Auto production can be shifted from Japan elsewhere. . .ultimately damaged vehicles need to be replaced in the country."
Authorities may, however, be concerned about the wider effects of the disaster on industry, with Tokyo Electric Power initiating black-outs across Japan until the end of April, while there was also a fire at a Cosmo Oil refinery.
"I would say the biggest risk is power," Takuji Okubo, chief Japan economist at Societe Generale, told Reuters.