Platinum Surplus Soars on Ailing Car Sector

Platinum is used in the manufacture of catalytic converters that help to reduce pollutants released by vehicles' exhausts.

Platinum's surplus tripled last year as the global carmaking sector hit the skids, metals consultancy GFMS said on April 23.

GFMS added in its latest annual Platinum & Palladium Survey that a drop in mine supply caused palladium's gross deficit to almost double to around 650,000 ounces in 2008.

Platinum and palladium are both used in the manufacture of catalytic converters that help to reduce pollutants released by vehicles' exhausts.

"The main finding of this year's survey as regards platinum is that its gross surplus more than tripled to over 260,000 ounces in 2008," said GFMS. "Much of this the consultancy ascribe to autocatalyst fabrication... being hit by weaker vehicle production, which has since fallen severely in the early months of 2009."

GFMS said that a further factor behind soaring supplies of platinum last year was a sizeable slump in the manufacturing of jewelery.

"However, the report also highlights a brighter note for jewelery -- a marked recovery in the second half of 2008, and continuing into 2009."

GFMS meanwhile forecast that platinum prices would trade between $900 and $1,375 an ounce during the rest of 2009, while palladium would range from $170 to $325 an ounce.

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