BLBG: Platinum Climbs on Demand Outlook in China; Palladium Soars
Platinum prices rose for the first time in five sessions on signs of increasing demand in China. Palladium futures jumped the most in almost a month.
Platinum imports in China surged 35 percent in March from a year earlier, said Tom Pawlicki, a metals analyst at MF Global Ltd. in Chicago, citing government data. The metal gained as much as 2.4 percent, while gold rose as much as 1.4 percent. Platinum and palladium are used in auto parts and jewelry.
“It is helping platinum to outperform gold and may also signal that jewelry demand in China is improving,” Pawlicki said in an e-mail.
Platinum futures for July delivery gained $21.10, or 1.8 percent, to $1,178.70 an ounce on the New York Mercantile Exchange, the biggest gain since April 13. The price dropped 5.5 percent in the previous four sessions.
Palladium futures for June delivery rose $11.15, or 5 percent, to $233.30 an ounce, marking the biggest increase for a most-active contract since March 26.
Platinum still has tumbled 42 percent in the past year, and palladium has dropped 50 percent as car and truck sales plunged in 2008 and early this year. Automakers use the metals in emissions-control parts.
Dennis Gartman, an economist in Suffolk, Virginia, and the editor of the Gartman Letter, said he is considering buying platinum and palladium, and selling gold, on prospects for a “stronger auto market in the future.”
China Car Subsidies
China’s government increased the amount it will spend on subsidizing purchases of new vehicles by 67 percent in a bid to revive demand. The government will spend 1 billion yuan ($146 million) instead of the 600 million yuan budgeted for subsidies, the Ministry of Commerce and Ministry of Finance said today.
Vehicle demand in the U.S., the world’s biggest auto market, plunged last quarter as the unemployment rate rose to the highest in 25 years. Japan’s auto market shrank 24 percent last quarter and overall sales in Europe fell 17 percent.
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three biggest automakers, may report quarterly losses after the global recession crippled sales, according to analysts surveyed by Bloomberg. South Korea’s Hyundai Motor Co. may also say its profit fell to the lowest in at least seven years.
Honda, Japan’s second-largest automaker, will report earnings on April 28. Toyota, the world’s largest automaker, is scheduled to release results on May 8, followed by Nissan on May 12.
