BLBG: Platinum, Palladium Prices Jump After Slumping Almost 50%
By Halia Pavliva
Nov. 5 (Bloomberg) -- Platinum and palladium climbed after the metals used in car parts and jewelry fell by almost half from prices a year earlier.
Platinum dropped 40 percent in the past 12 months, while palladium declined 42 percent as global auto sales plunged. Most platinum consumption is for emissions-control parts for cars and trucks. Platinum, also used as a hedge against inflation, has fallen 62 percent from a record $2,308.80 an ounce in March.
``The complex tries to regain its footing from apparently oversold levels,'' Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a report.
Platinum futures for January delivery rose $22.30, or 2.6 percent, to $880 an ounce on the New York Mercantile Exchange. In October, the price plunged 19 percent, the fourth consecutive monthly decline.
Car manufacturers use about 60 percent of global platinum output, according to estimates by Johnson Matthey Plc, a London- based metals trader, refiner and researcher.
Palladium futures for December delivery jumped $9.30, or 4.4 percent, to $219 an ounce. The most-active contract has plunged 64 percent from this year's high of $600 on March 4.
U.S. car and light-truck sales plummeted 32 percent in October to the lowest since January 1991, led by General Motors Corp.'s 45 percent slide, as reduced access to loans and a weaker economy caused consumers to shun purchases.
GMAC LLC, the GM financing arm that has been gripped by a cash squeeze, posted its fifth straight loss and said its mortgage unit may not survive. GMAC's third-quarter loss widened to a record $2.52 billion while revenue plunged 43 percent, the Detroit-based lender said today.
``GMAC and GM face a dwindling sand clock and are adding to the caution being witnessed in the platinum-group metals,'' Nadler said.
A fire at Anglo Platinum Ltd.'s Polokwane smelter 200 miles (322 kilometers) north of Johannesburg may cut production by as much as 200,000 ounces this year, the company said today. Anglo is the world's biggest platinum producer.
To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net.
