The first drop in platinum mine supply in four years and record car sales, the biggest source of demand, are reducing a surplus of the metal and shoring up prices on the brink of a bear market.
Output will drop 4% to 6.14 million ounces this year as labor strikes and safety concerns disrupt mining in South Africa, the biggest producer, Barclays Plc estimates. That will diminish the annual glut by 90% to 37,000 ounces, the bank predicts. Prices will average $1,750 an ounce in the fourth quarter, 22% more than now, the median of 13 analyst estimates compiled by Bloomberg shows.
The metal, used to make autocatalysts and jewelry, slid 16% in the past three months and hedge funds are now their least bullish since at least 2009 on speculation that slower global economic growth will curb demand. Prices are now within about 1 percentage point of average production costs, which continue to rise as companies dig as deep as 1.3 miles to find ore and face surging wage and energy bills. . .View Full Article