Platinum Slumps for Sixth Day as Slowing Growth Reduces Demand

By Jae Hur

Sept. 30 (Bloomberg) -- Platinum fell for a sixth day and is heading for its worst quarterly slide since at least June 1987 after the rejection of a $700 billion U.S. financial rescue plan increased concern that slowing global growth will slash demand.

Before today, the metal, used in car exhaust systems and jewelry, had lost 47.3 percent since June 30. Oil slumped more than $10 a barrel yesterday and U.S. stocks plunged after the bailout plan intended to restore confidence in the U.S. financial system was defeated 228-205 in a congressional vote.

``There's no reason to buy in this market,'' Kazuhiko Saito, strategist at Interes Capital Management Co., said by phone today in Tokyo. ``The market is now waiting for tomorrow's car sales data from Japan and the U.S. The numbers might not be positive.''

Immediate-delivery platinum fell $7, or 0.6 percent, to $1,083 an ounce at 12:30 p.m. in Tokyo. It dropped 2.9 percent yesterday having traded as low as $1,067.35, the lowest since Sept. 17.

Palladium for immediate delivery was down 0.5 percent at $212.50 an ounce after losing 5.5 percent yesterday. It earlier fell to $210.25, the lowest since October 2005.

Platinum for August delivery fell as much as 296 yen, or 7.9 percent, to 3,461 yen a gram ($1,033 an ounce), the lowest since November 2005. It was at 3,463 yen at the 11 a.m. break on the Tokyo Commodity Exchange.

Platinum consumption by automakers accounts for more than 60 percent of global demand for the metal, according to Johnson Matthey Plc, which makes about a third of the world's automobile catalysts.

Tokyo platinum futures plunged the exchange-imposed daily limit on Sept. 10 after a report showed passenger car sales in China in August fell for the first time in three years.

Platinum will swing from a deficit to the largest surplus in 10 years as demand declines amid an economic slowdown, said Paul Walker, chief executive officer of London-based research company GFMS Ltd., said yesterday.

``We estimate it's going to be about 200,000 ounces of surplus this year, and possibly larger,'' Walker said in an interview in Kyoto. The metal is used in jewelry and catalytic converters that reduce noxious gases from auto exhausts.

To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net