"Platinum Jumps Most Since 2000 in London on Deficit Concern By...

"Platinum Jumps Most Since 2000 in London on Deficit Concern

By Danielle Rossingh

Nov. 20 (Bloomberg) -- Platinum gained the most in more than six years in London on concern demand for the metal used in car catalysts and jewelry may outstrip supply. It was the second-biggest move of any commodity worldwide.

Supplies of the metal also used in electronic devices such as iPods and computer hard disks will rise 5.3 percent to a record 7 million ounces in 2006, Johnson Matthey, the world's largest distributor of platinum group metals, wrote in a report on Nov. 14. Demand will increase 5 percent to a record 7.02 million ounces, leaving the market with a supply deficit of 20,000 ounces, the London-based company said.

``The fundamentals for platinum are very strong, the market is taking a positive signal from the Johnson Matthey report,'' James Moore, a Kettering, England-based precious-metals analyst with TheBullionDesk.com, said in a telephone interview today. ``The funds are ramping it up,'' Moore said, adding that there was also ``some industrial buying.''

Platinum for immediate delivery rose 4.9 percent to $1,248 an ounce as of 5:15 p.m. in London. Earlier, it climbed as much as 6.3 percent to $1,264.50. A close at that price would give the metal the biggest one-day gain since May 1, 2000. It traded at a record $1,340 on May 12.

Palladium for immediate delivery in London gained $4, or 1.3 percent, to $322.50 an ounce.

Alternative Investment

Platinum's surge also pushed up shares of platinum producers including South Africa's Anglo Platinum Ltd. and Impala Platinum Holdings Ltd.

Shares of Anglo Platinum, the world's largest platinum producer, jumped 67 rand, or 9 percent, to close at 809 rand. Impala Platinum, the second-biggest, added 12.95 rand, or 8.1 percent, to 1,719.50 rand, the biggest one-day gain since July 3. Lonmin Plc, the world's third-biggest platinum miner, rose 50 pence, or 1.7 percent, to 2,980 pence.

The platinum market is moving closer to a match between supply and demand after eight years of deficit. The deficit this year is down from 70,000 ounces in 2005, Johnson Matthey said.

The metal has risen for four straight years on demand for precious metals as an alternative investment tightening emissions legislation in the U.S. and Europe. Production of diesel-powered cars carrying pollution-control devices has grown. Platinum demand from carmakers may rise almost 15 percent this year to 4.38 million ounces, Johnson Matthey said.

On Nov. 3, platinum surged as much as 5.4 percent in London on speculation that an exchange-traded fund linked to the price of the precious metal may be introduced.

Should a platinum ETF go ahead, this may add ``between 5 and 15 percent,'' to the price, Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Heraeus Metallhandels GmbH in Hanau, Germany, which owns five precious-metal refineries globally, said in an e-mail today.

ETFs purchase and store metal, allowing investors to trade the assets without owning them. Silver had its biggest jump in 11 years on April 28, when Barclays Plc began offering a silver- backed ETF. "

(AQP headed for $30+ imo)