Barclays: Platinum Stockpiles Limiting Price Action

Explaining why platinum prices have seen little movement even as operations at South Africa’s three main producers of the metal are impacted by strikes, Shanghai Metals Market quotes a Barclays plc (NYSE:BCS) research note that states that stockpiles of the metal are limiting price action.

As quoted in the market news:

Larger-than-expected above-ground stocks were one of the reasons the South African platinum ETP had a limited effect on prices last year. Furthermore, the more placid environment in 2013 enabled producers to rebuild inventory. Our database shows an increase of almost 200koz for the year-to-September 2013 across the larger producers.

Available data show, platinum stocks held by Nymex warehouses rose 20% y/y, surpassing 250koz and marking the highest levels in at least ten years. Platinum sponge discounts also suggest the market is yet to tighten, while the physically backed ETPs hold in excess of 2.7Moz.

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