Page last updated at 13:21 GMT, Monday, 19 May 2008 14:21 UK

Platinum prices 'set to rise 50%'

Platinum
Platinum is used in jewellery and catalytic converters

The price of platinum could increase by 50% in 2008, according to a poll of analysts by the Reuters news agency.

Prices are pushed higher by production problems in South Africa and a rise in demand for catalytic converters using the metal to filter fumes.

The poll sees the median price of platinum at $2,000 an ounce in 2008 and $2,100 in 2009. It was $1,304 in 2007.

Anglo American, which produces 40% of world platinum output, has been hit by power cuts and strikes.

New record?

"The structural problems with power supply [in South Africa] are not being resolved in the short run," said Peter Fertig, a consultant at Dresdner Kleinwort.

Separately on Monday, a leading metals refiner Johnson Matthey said the power crisis in South Africa could cut platinum output by 200,000 ounces in 2008, in its 2008 platinum report.

Angloplat - the platinum business of Anglo American - has also seen production dented by flooding at its South African Amandelbult mine.

Edel Tully, a metals analyst at Mitsui Global Precious Metals, said that out of the five precious metals the firm would remain "most bullish" for platinum.

"We believe that the metal can eclipse its record high of $2,290 and trade up to $2,500 this year," he said.

Platinum is mainly used into jewellery and catalytic converters. As stricter rules have come into force regarding vehicle emissions, the need for platinum has risen.


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