Platina en palladium: tot einde jaar weinig beweging te verwachten.....
The global economy appears to be stabilizing just enough to enable the platinum group metals to avoid further losses or maybe even bounce modestly during the remainder of the year, but is not yet robust enough to fuel a sharp turn higher any time soon, analysts said.
Several said they look for the PGMs to remain near current levels or rise moderately over the remaining four and one-half months of 2012.
Spot platinum fell as far as $1,381 an ounce in late July, its lowest level of the year, after trading as high as $1,734 in February. Spot palladium fell to nearly $558 in late July after a February peak of $724.40.
Both metals have meandered largely in a sideways trading range since hitting their lows. Around 1 p.m. EDT Wednesday, platinum was at $1,409.50 and palladium at $586.80.
“We’ve seen prices move lower over the course of the year, given weak economic activity, with some reduced investor interest,” said Carlos Sanchez, director of risk management with CPM Group.
The PGMs rely upon industrial demand, particularly auto catalysts, so prices tend to suffer when the economy does likewise. Analysts pointed out that economic growth has slowed in a number of key nations, including the U.S. and China—the world’s two largest car markets—and parts of Europe are in recession.
Forecasting firm LMC Automotive has said global light-vehicle sales are expected to reach a record 79.4 million units this year. However, the company said while sales in the first half hit an annualized selling rate of 80 million, the pace is expected to soften though the second half as emerging and mature markets face slowing economic conditions.
“The platinum market has been a laggard and a poor performer. The tone of the market has been considerably weaker than it was the last half of last year,” said Bill O’Neill, one of the principals with LOGIC Advisors. “There has been a lack of physical demand out of Asia, which is absolutely crucial for platinum. We’re seeing limited Asian participation.”
Further, Sanchez pointed out, summer is often a seasonally weak period for auto demand, particularly as automakers are retooling plants for a new model year.
Meanwhile, even though South African supplies remain a concern for the market, this may not be as dramatic as earlier in 2012, O’Neill said. A strike occurred at the beginning of the year at Impala Platinum’s Rustenburg mine, the largest in the world.
“The overall supply/demand dynamics do not set up well for platinum and palladium,” O’Neill said.
Analysts Anticipate Steady To Modestly Higher Prices Ahead
O’Neill looks for platinum to “stay roughly where it is” for the remainder of the year. One positive influence, however, is the potential for higher gold prices, which could drag PGMs higher, he said.
“I don’t see where we’re going to see any major explosion in economic growth any place,” O’Neill said. “I think we’re in a long-term pattern of having bottomed and moving into a slightly better economic atmosphere. But it’s going to be slow. I don’t think it’s going to be reflected in significantly higher platinum prices for the rest of the year. The economic landscape here (in the U.S.), as well as in China and the rest of Asia and Europe, doesn’t set up for any kind of demand surge in platinum.”
Others do look for a move higher in prices, but not dramatically.
Robin Bhar, metals analyst with Societe Generale, looks for an eventual pick-up as Chinese economic conditions improve. The country, a key consumer of a wide range of commodities, has become the world’s largest auto market and is also the largest buyer of PGM jewelry.
“We expect prices to remain near these levels for the rest of the summer,” Bhar said. “And when we move into Q4, we are expecting prices to move higher modestly as a rebound in China gets under way. But the rebound will not be that powerful because of the recession in Europe and subpar growth in the U.S., particularly in the wake of the so-called ‘fiscal cliff’ with the automatic increases in taxation and cuts in spending.”
Ongoing supply constraints in South Africa should also provide some support for the metal, such as ongoing potential for labor- and power-related supply disruptions, Bhar added. The chief executive of Aquarius Platinum, which Tuesday reported a $154 million loss for the year ending in June, said the general operating environment in South Africa combined with low prices is putting the South African PGM sector under pressure.
“The longer prices stay at these levels, we will get more production cutbacks in South Africa, in particular,” Bhar said. “But even without that, a rebound in the global economy, led by China, should be constructive for prices.”
Bhar figures platinum could bounce by $100 by year-end and palladium could add $50.
“Going forward, prospects do look brighter for both platinum and palladium,” Sanchez said, citing some stabilization in economic activity. “But that said, those prospects aren’t as bright as early in the year,” he continued, noting that global economic recovery has been slower than many anticipated. “Demand for autos, while recovering, also hasn’t grown as expected.”
Sanchez figures platinum should hold support between $1,350 and $1,400 and palladium between $550 and $600. “We’re likely to see platinum move higher perhaps to the $1,500, maybe even $1,600, level. Palladium could get back to test $700 if conditions do improve.”
Much will hinge on factors such as Europe’s sovereign-debt issues and whether the Federal Reserve undertakes a third round of quantitative easing, as many metals traders anticipate, he said.
China’s economy is no longer growing at a double-digit-percentage clip but still posted a 7.6% gain in the second quarter. Expectations are it may continue at a 7.4% to 7.5% clip.
“That may keep a cap on both platinum and palladium prices. But I think we’re at the bottom and it looks like we may move higher from here, but not much higher,” Sanchez said.
By Allen Sykora