Platinum Futures Fall on Slowing Global Auto Demand, Currency

By Jae Hur

Nov. 27 (Bloomberg) -- Platinum futures fell in Tokyo on speculation the global economic slowdown will reduce production and sales of vehicles that use the metal in exhaust systems.

Ford Motor Co. said yesterday it will cut European output by about 10 percent next year as the credit crunch and global recession undermine demand for new cars. Platinum for immediate delivery, which has declined 62 percent from a record in March, fell 0.6 percent yesterday, its first decline in four days.

Platinum’s “just catching up a drop in cash prices yesterday,” Shuji Sugata, research manager at Mitsubishi Corp. Futures & Securities Ltd. in Tokyo, said today by phone. Prices also eased as “the yen’s gain against the dollar put pressure on Tokyo futures,” he said.

October-delivery platinum fell as much as 1.6 percent to 2,617 yen a gram ($855 an ounce) on the Tokyo Commodity Exchange and was at 2,626 yen by the 11 a.m. local time break. Trade was thin because of the Thanksgiving holiday in the U.S. today, Sugata said.

The yen gained to 95.24 per dollar from 95.67 late yesterday in New York. The Japanese currency’s advance against the dollar reduces the value of yen-based futures in Tokyo.

Immediate-delivery platinum was down 0.2 percent at $863 an ounce by 11:15 a.m. Tokyo time, having traded between $861 and $871 today. Palladium for immediate delivery was up 0.5 percent at $194.50 an ounce after falling 2.5 percent yesterday.

Automaker Cuts

Platinum, used in jewelry and autocatalysts, has declined from a record $2,301.50 an ounce in March as sales at carmakers plunged. Automakers globally are cutting production as recessions in the U.S., Japan, and the 15 European nations that use the euro sap demand for cars.

U.S. industrywide car sales are headed for the worst year since 1991 as banks cut back on lending and unemployment rises. U.S. automakers led by General Motors Corp. are seeking $25 billion in federal loans to help stave off a financial collapse.

Mazda Motor Corp., Japan’s fifth-largest carmaker, said it will halt production at two domestic plants for two days in December on lower demand. Mazda, based in Hiroshima, Japan, will halt production at two plants in Yamaguchi prefecture as part of its plan to reduce output by 73,000 vehicles in the second half of the fiscal year, it said yesterday.

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