Rally in platinum price shows no signs of ending

The platinum price closed at a four-month high on Wednesday, adding $12 to $1,729 an ounce in New York on renewed worries about a global supply shortage.

Platinum built on a $21 gain racked up yesterday after reports that Zimbabwe had seized land from Zimplats, the country’s number one producer 49%-owned an operated  by South Africa’s Impala Platinum (LON:IPLA).    

Whether that effects Zimplats expansion  plans  to up production to 270,000 oz by 2015 is not clear.

But what has the potential to be even more disruptive of the market is the decision to ban raw exports of the precious metal from the African nation, which enjoys the second largest reserves in the world behind neighbouring South Africa.

Zimbabwe has given the industry two years to start smelting operations, but given the costs and planning involved that is probably an ambitious target.

Zimbabwe’s move follow crippling strikes and planned mine closures in South Africa and has the potential to push the PGM market further into deficit.

Unlike gold and silver PGM production  is highly concentrated.

South Africa produces more than 75% of the global supply, while most of the remainder comes from Russia. Zimbabwe is ramping up production but at the moment produce fewer than 300,000 ounces.

Primarily used to reduce harmful emissions from vehicles, platinum is now up over 12% so far this year and sister metal palladium has added 9% in value in 2013 and is now trading at the highest since September 2011.

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