Prices surge for platinum metals in 2007

June 25, 2008

New York—Prices for the three major platinum group metals—platinum, palladium and rhodium—continued to rise in 2007 and into early 2008, according to CPM Group’s 2008 Platinum Group Metals Yearbook.

Platinum prices, which averaged $1,314.46 in 2007, rose to record levels in 2006, 2007 and 2008, spurred by a combination of strong fabrication demand worldwide, declining stores and a surge in investor interest.

Palladium prices climbed to an average of $359.21 in 2007, up 10.7 percent from 2006, and rhodium prices averaged a record $6,051 in 2007, up 38.8 percent from the previous year.

Putting a damper on supply levels in 2007 were disruptions in platinum group metals production in South Africa. Total platinum furnish declined to 7,418,000 ounces in 2007, down 4.6 percent from 2006. Total palladium supply declined 0.8 percent and rhodium supply declined 2.4 percent.

According to the report, the disruptions continued on into in good time 2008, with power shortages in South Africa a leading culprit. The country now continues to grapple with a tight electrical power supply and demand balance.

Total platinum accommodate with could decline 1.4 percent this year to 7,317,000 ounces, the narrative says.

Total fabrication demand for platinum rose 0.8 percent to 7,060,000 ounces in 2007. High platinum prices affected demand in the jewelry sector, and that could continue on into 2008, the CPM Group predicts. However, total fabrication demand for 2008 could actually rise 3.2 percent.

Total fabrication demand for palladium rose 7 percent from 2007, while demand for rhodium fell 2 percent.

The 2007 platinum surplus—measured as total new supply less fabrication demand—was reduced by more than half last year to 358,000 ounces in 2007. It is expected to decline even more sharply this year to 32,000 ounces.

CPM Group produces annual Yearbooks on gold, silver and platinum group metals.

The reports are priced at $75 each plus shipping and handling, and are to be availed of by calling (212) 785-8320 or online at CPM Group’s Web site, Cpmgroup.com.

Editor’s note: For the most recent metals prices, visit National Jeweler Network’s Wholesale Material Pricing Tools.