BLBG: Platinum to Extend Rally in 2010, Commerzbank Says (Update1)
By Kim Kyoungwha
Feb. 4 (Bloomberg) -- Platinum and palladium will rise to $1,700 an ounce and $500 an ounce respectively this year as an economic recovery fuels demand for cars and investor interest remains solid, Commerzbank AG said.
“Demand for platinum group metals is likely to remain very strong in 2010,” Eugen Weinberg, the bank’s head of commodity research in Frankfurt, wrote in a client note yesterday. “The world economy is recovering and financial investors’ buying interest is robust.”
Platinum for immediate delivery rallied by a record 57 percent in 2009 and is up 7.3 percent this year, outperforming gold’s 1 percent rise. The metal fell 0.5 percent to $1,567 an ounce at 8:35 a.m. in Singapore, and last traded above $1,700 on Aug. 1, 2008. Palladium dropped 0.7 percent to $434.38 an ounce.
Platinum will average $1,600 an ounce in 2010, up from $1,175 last year, and rise to $1,750 in 2011, Weinberg said. Palladium will average $455 an ounce this year and $525 in 2011, from $250 an ounce in 2009, he said.
Platinum will also benefit from newly launched exchange- traded funds in the U.S. that have “rapidly established themselves” as a new component of demand, Commerzbank said. The ETFS Platinum Trust and ETFS Palladium Trust began trading on the NYSE Arca exchange Jan. 8, data compiled by Bloomberg show.
Industrial products, including catalytic converters that strip pollution from automotive exhausts, accounted for about 70 percent of platinum demand in 2008, according to Johnson Matthey Plc. In contrast, industrial and dental products make up about 11 percent of demand for gold, World Gold Council figures show.
U.S. auto sales will rise 20 percent to 12.4 million in 2010, the Ann Arbor, Michigan-based Center for Automotive Research said Dec. 15.
China supplanted the U.S. as the world’s largest car market after vehicle sales jumped 46 percent to 13.6 million last year. It may sell as many as 15 million in 2010, according to General Motors China Inc. President Kevin Wale.
To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net
