Johnson Matthey forecasting platinum supply deficit to grow this...

Johnson Matthey forecasting platinum supply deficit to grow this year...

http://www.bloomberg.com/apps/news?pid=20601081&sid=aMJXcTvHLQnU&refer=australia

Platinum supply in 2008 will fall short of demand by 240,000 ounces, the most in five years, as global output drops faster than consumption because of mining disruptions in South Africa, said Johnson Matthey Plc, which makes a third of all autocatalysts, which use the metal.

Platinum has plunged 64 percent from a record $2,308.80 on March 4 and is down 45 percent this year.

`Stronger Price' Possible

``It was the speculator binges that caused the price to go up and then down this year more than the fundamentals,'' said Peter Duncan, the market-research general manager at Johnson Matthey. ``If the fundamentals were to kick back in, they would support a stronger price.''

Platinum may drop as low as $700 and rise as high as $1,400 in the next six months, Johnson Matthey said.

Commodity prices will recover once the financial crisis eases, said Tom Hartmann, a commodity analyst at Altavista Worldwide Trading Inc. in Mission Viejo, California.

``There's so much money on the sidelines,'' Hartmann said. ``When that money starts coming back to the equity markets, then you'll see some money start to flow back into commodities. That's when inflation can get ugly.''

http://www.mineweb.co.za/mineweb/view/mineweb/en/page35?oid=73283&sn=Detail

Johnson Matthey forecasts 240,000 ounce platinum supply deficit this year

Johnson Matthey says there are a number of positives for next year’s platinum production from South Africa, but warns against too high expectations for price increases.
Author: Tessa Kruger
Posted: Tuesday , 18 Nov 2008

JOHANNESBURG -

South Africa which produces the bulk of the world's platinum production will probably see output increase "modestly" next year as a number of positives such as first significant production from new platinum mines and established mines' recovery from operating problems come into play.

Johnson Matthey said after forecasting a platinum deficit of 240,000 ounces for 2008 today, there would be a number of positives for South African platinum production next year, including three new mines, Blue Ridge, Pilanesberg and Smokey Hills that will deliver its first significant production.

The organisation's David Jollie said there were a number of other operations in the ramp up phase, such as Anglo Platinum's open pit expansion at PPRust and established mines such as Amandelbult that experienced operating difficulties this year.

However, Johnson Matthey also believed that constraining factors such as skills shortages and safety stoppages would continue in the platinum industry in 2009.

It expected a difficult operating environment to continue next year, warning that the market should be careful regarding its expectations of new production next year.

"Platinum production will in all probability increase modestly," he said.

Jollie elaborated that there was still potential for expansion of platinum mines and projects at current prices but it would be "nothing like we expected a year ago".

The market has seen producers reviewing their capital expenditure plans and there was no doubt that more expansions would be delayed. Eastplats has for example put its Crocodile River Mine on care and maintenance and rescheduled new projects at the same time.

Johnson Matthey forecast a platinum price ranging between $700 and $1 400 over the next six months and a palladium price of between $125 and $300.

It said platinum could trade as low as $700/ounce if the current economic crisis continued and investors shunned commodities, but the price would move to the high end of the forecast, reflecting fundamentals, if appetite for risk returned.