whats happening:, page-3

Mineweb had this article on Friday. I think this has also given the traders a chance to make some mula.
There is a rising trendline on the daily chart at around $2.27
which will hopefull provide some support.


FUNDAMENTALS STILL POSITIVE
Platinum mining stocks under the hammer as metal price falls
Platinum stocks plunge and splutter as the white metal’s price sinks to 12-week lows.

Author: Barry Sergeant
Posted: Friday , 18 Jul 2008

JOHANNESBURG -

Listed platinum stocks were under a merciless hammer on Friday, as the platinum metal price fell by more than $40 day-on-day to around $1,844 an ounce, a level not seen in 12 weeks. The sell off was in line with the fierce and ongoing softening of the broad commodities complex, in place since Tuesday this week.

On the Johannesburg bourse, Aquarius, a leading Tier II platinum miner, was down by more than 10% at one stage, as the three Tier I stocks spluttered in the background. Anglo Platinum and Impala Platinum were down by between 5% and 8%, while Lonmin fell to 12-month lows in London, where it holds a primary listing. The Big Three are now at least one-third off their price highs. Some of the big platinum stars of the past year have fallen very hard. Eastern Platinum is more than 50% off its highs, as are Anooraq and Wesizwe; Jubilee has lost two-thirds of its value, and Braemore, some three quarters.

The platinum metal price has fallen some 20% since its record highs around $2,309 seen in early March this year. The fundamentals for platinum have been uncontroversial for some time, given that South Africa produces around 80% of global platinum group metal (PGM) output, and has been known for some months to be facing medium to longer term electricity generating challenges, along with increasingly skills shortages. South African PGM miners are also increasingly known for lagging on targets, led by Anglo Platinum and Lonmin, with Impala generally rated the least culpable on this score.

Platinum, which is used for industrial purposes, not least exhaust catalysts in vehicles, and also jewelry, has been under price pressure, along with practically the entire commodities spectrum, on intensifying fears that the global economy is slipping into a trend of steadily slower growth. Palladium, a member of the PGM group, and mainly used in catalysts, is now 30% off its multi year highs seen earlier this year, while rhodium, a critical metal in a number of specialised processes, is some 5% of its $10,000 an ounce highs.

A fireball of kinds was set in motion on Tuesday when Ben Bernanke, chairman of the Federal Reserve, the US central bank, told the US Senate that "slower global growth" would lead "to a cooling of commodity markets". Bernanke's key theme in his semiannual address on monetary policy was that inflation fears remained a key concern to Federal Reserve policymakers.

The observations triggered an immediate fall of around $10 in the oil price, which for some weeks had been looking to make an assault on fresh records by moving above the $150 a barrel level. The rout triggered a sell off of most commodities, with high beta gold and silver bullion showing the most resistance to falling. Platinum metal prices have fallen nearly $200 an ounce in the past five days, and would not need to fall much further to touch five month lows. The commodity selling mania triggered heavy selling of listed producers of commodities, including oil stocks.

When markets slow down and catch a breather, the relatively attractive fundamentals for PGMs may be favourably re-examined. In a benchmark report on platinum published in May this year, Royal Bank of Canada Capital Markets outlined the case for how South Africa's electricity supply shortage would likely to continue for at least four years, when it would be difficult for the platinum majors to expand their own output, "let alone" treat material from platinum developers, known as "juniors".

After considering substantive detail on platinum properties, and the predicament of Eskom, the State-owned electricity generating monopoly, RBCCM concluded with a broad scenario that leads to higher metal prices "in light of the already tight market balance".

According to the CPM Platinum Group Metals Yearbook 2008, published last month, platinum prices averaged a record $1,315 in 2007, some 14.6% above the prior record average price of $1,147, seen in 2006. During the first five months of this year prices averaged $1,946, up 56.9% from the similar period average in 2007. In early March prices reached the record intraday high of $2,308.80.

Total platinum supply declined to 7.4m ounces in 2007, down 4.6% from a record 7.8m ounces supplied in 2006. The bulk of the decline occurred in South African mine production, and was attributed to a series of labor disruptions, accidents, mechanical and operational problems. Power shortage problems became a new reality earlier this year and total platinum supply is seen as possibly slipping 1.4% this year.

Palladium prices climbed to an average of $359 in 2007, up 10.7% from the $324 averaged in 2006. During the first quarter of this year prices spiked to $600 an ounce. Rhodium prices averaged a record $6,051 in 2007, up 38.8% from the previous average record price of $4,359 seen in 2006.