Anglo Platinum Says Metal to ‘Find Support’ at More Than $1,200

By James Ludden

July 27 (Bloomberg) -- Platinum will “find support” above $1,200 an ounce for the rest of the year as demand for autocatalysts climbs and jewelry sales rise in China, said Anglo Platinum Ltd., the world’s largest producer of the metal.

Auto demand for platinum group metals, which also include palladium and rhodium, is likely to outpace an increase in car production because inventory levels are low, Anglo Platinum said today in its half-year earnings statement. Platinum jewelry sales to China increased by 400,000 ounces in the first half from a year earlier, it said.

“This response highlights the strength of platinum jewelry branding and the fundamentally different nature of Chinese platinum jewelry demand,” the Johannesburg-based company said. “Global economic conditions continue to depress jewelry sales in most western markets.”

Platinum for immediate delivery gained $21.50, or 1.8 percent, to a one-month high of $1,209.50 as of 8 a.m. in London. It has rallied 30 percent this year, outpacing gold and silver, on expectations an economic recovery will increase sales of jewelry and cars.

About 60 percent of all platinum is used in autocatalysts, designed to curb noxious tailpipe emissions, according to Johnson Matthey Plc, which accounts for a third of global manufacture of the devices.

Platinum will “trend to a long-term level” of $1,350 an ounce, Anglo Platinum said. The company plans annual production of about 2.5 million ounces for the next three years, followed by a “small but steady increase,” it said.

Anglo Platinum expects to supply as much as 2.6 million ounces of refined metal for the full year should demand increase, while global market supply is likely to match demand in the second half, it said. Power shortages in South Africa last year contributed to a 375,000-ounce shortfall in 2008, according to Johnson Matthey.

The market will slip to a deficit “in the next few years” as economies worldwide emerge from recession, the company said.

To contact the reporter on this story: James Ludden in London at jludden@bloomberg.net