FXstreet.com (Barcelona) - Despite the fact that the demand for platinum is low and a rise in prices is not expected for now, Standard Bank analyst Walter de Wet emphasizes that “from a risk/return perspective, we see little value in being short platinum.”
The expert believes that the recent violent strike at the South African Lonmin platinum mine and the resulting substantial production losses make the situation “too risky to be caught short in platinum.” He reminds that this is not the first strike in a platinum mine this year, leading to a drop in production and consequently pushing up the price of producing an ounce of platinum.
“We maintain that SA platinum production will be 567K oz less in 2012 than in 2011 (we expect SA to produce 4,288K oz in 2012), resulting in an actual deficit market this year. However, we expect the market to have returned to a surplus in 2013,” the analyst concludes.
The expert believes that the recent violent strike at the South African Lonmin platinum mine and the resulting substantial production losses make the situation “too risky to be caught short in platinum.” He reminds that this is not the first strike in a platinum mine this year, leading to a drop in production and consequently pushing up the price of producing an ounce of platinum.
“We maintain that SA platinum production will be 567K oz less in 2012 than in 2011 (we expect SA to produce 4,288K oz in 2012), resulting in an actual deficit market this year. However, we expect the market to have returned to a surplus in 2013,” the analyst concludes.
