Reuters reported yesterday that while thus far striking at major South Africa-based platinum mines has had little effect on prices for the metal, that could change if production is halted for long enough. The tipping point will be the exhaustion of aboveground platinum stockpiles.
As quoted in the market news:
‘The big question over the last year or so has been, ‘Where are these above-ground stocks of platinum, and who holds them?” Macquarie analyst Matthew Turner said. ‘The size of those stocks is important, but it’s also important who holds them.’
Some of this metal is in the hands of the miners themselves, and some is held by carmakers, who along with Chinese jewellery buyers are the main end-users of platinum.
Liquidation of these supplies, held as a hedge, will have little price impact, analysts say, but once they are exhausted, a higher price may be needed to draw out further stocks of metal.