Vehicle makers may defy rallies in platinum prices and begin replenishing stocks as the second quarter rolls on.
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The precious metal is a key component in catalytic converters.
Supply concerns stemming from a labour dispute in South Africa lifted cash platinum to a two-week high of $US1,301 an ounce last week and the benchmark contract on the Tokyo Commodity Exchange to a new record high of 5,117 yen ($41.43) a gram on Monday, Reuters reported.
“We’re seeing tough resistance around $1,300, but there is no doubt about the current bullishness in Tokyo prices, especially after they broke through a new record high of above 5,100 yen,” Shuji Sugata, manager at Mitsubishi Corp Futures and Securities, told the news agency.
Spot platinum was quoted around $1,286 an ounce on Tuesday, higher than late New York levels but off last week’s highs, Reuters said.
Dealers expected auto makers in Japan and other parts of Asia to replenish stocks, though there was a lack of activity in China, the world’s largest consumer of platinum jewellery, the news agency added.
“End-users of platinum will be reluctant to buy heavily at current levels, but they have to buy even at a high cost because demand is there,” a dealer told Reuters, adding that industrial buying tends to grow around the start of each quarter.
The news agency noted that platimum hit a record high of $1,395 last November on speculation the launch of exchange traded funds backed by physical platinum would lure a broader range of investors to the metal.
Johnson Matthey was quoted in May as saying that platinum may set a new record high of $1,400 an ounce over the next six months, buoyed by interest in ETFs, limited stocks and fund buying.
