Presentation of the platinum
Little known, platinum is nevertheless a highly sought-after precious metal. It is even rarer than gold with only a little over 6 million ounces produced each year. Platinum is quoted in US dollars per ounce and one ounce here represents just over 31 grams of platinum. But it can also be found on some charts displayed in Euros per ounce.
The countries that produce platinum are mainly South Africa and Russia, but the volumes extracted from the mines are 12 times less than those of gold.
Like other metals, such as zinc, platinum is mainly used by the automotive industry, which buys nearly 60% of the world's production. It is used in the manufacture of catalytic converters. Another smaller part of this production (20%) is used by the jewellery industry.
Platinum is a very valuable metal and is considered a precious metal because of its rarity.
Platinum quotation and history :
Platinum is listed on the London market, which also handles the listing of palladium. This is the London Platinium and Palladium Market (LPPM). Its quotation is revised only twice a day.
Platinum can also be traded through futures and options contracts on the Japanese TCE (Tokyo Commodity Exchange), where more than 10 million transactions in the precious metal take place each year.
Smaller volumes are also traded on the NYMEX (New York Mercantile Exchange) and MIDAM (Midamerica Commodity Exchange in Chicago).
Historically, platinum prices have been closely linked to the performance of the automotive industry. For this reason, platinum prices have risen sharply since the early 2000s, reaching an all-time high of $2,230 per ounce in 2008. After 2008, and like all other commodities, its price fell sharply as a result of the global economic crisis and the recession that affected the automotive production sector, and reached $1,000 per ounce.
Since then, as production has outstripped demand, platinum prices have continued to decline.
Indicators to follow for platinum trading:
There are several factors that can have a significant influence on platinum prices, and it is important to be aware of these factors to determine the direction of the trends.
Among these factors, we can mention stocks and of course the figures on demand and supply, but also the policies of the two countries that produce the most platinum and especially that of South Africa, which supplies nearly ¾ of the world's platinum.
Of course, in order to anticipate the volume of demand, it is also necessary to take an interest in the economic situation of the importing and therefore consuming countries. These countries are mainly Japan, the United States and a few European countries that are mainly involved in the automotive industry, such as France and Germany.
This is because the performance and demand of the automotive sector has a strong influence on platinum prices, especially for companies that manufacture environmentally friendly vehicles and therefore use catalytic converters.
In the past, we have seen prices rise when the automotive sector was booming, and then fall when the sector declined and demand fell, as was the case in 2008.
It is also important to be aware of the impact of rising platinum prices on demand, as sharp increases often result in reduced demand from the jewellery sector and an attempt to substitute by automobile producers.
The following are the main things to watch out for:
- The export policy of the two main producing countries
- The economic situation of importing countries
- The performance of the automotive industry
- The value of the US dollar against other currencies which determines the most advantageous exchange rates for bulk purchases of platinum