Platinum prices plunged 5% yesterday and precious metals markets in Europe were mostly quiet this morning, but traders say things could heat up later in the session, with platinum prices continuing their drop.
The platinum price losses on the New York Mercantile Exchange yesterday slowly added to drops that started last week when Russian producer Norilsk Nickel said it resumed shipments of the metal, along with rhodium. The morning fix was $477 an ounce, the lowest since March 30, according to Reuters.
"There was fund selling in New York and there was the Norilsk news," one London dealer told Reuters. "On the back of those, we could move down to $450, where there should be good support. "The trouble is that we still don't know just how much Norilsk will let loose on the market. But the market is still short and waiting for more sellers."
Metals analysts said there was no definitive proof of the resumption of shipments. But in a tight market, none was needed.
In the absence of supplies from the No. 2 platinum-producing nation, prices soared to 11-year highs of over $500 an ounce in February before slipping. Russia typically accounts for 25%30% of world sales of the metal, used in the automotive, jewelry, electronics and petroleum refining industries.
Russia produces about one-fifth of the world's platinum, making it the second largest producer after South Africa. Almost all exports of Russian platinum, used mostly in jewelry and autocatalysts, were blocked since December 1998 by a poorly worded law that was amended in January.
- by Mark E. Dixon