By Geena Paul
LONDON (Commodity Online): With the demand for the yellow metal going up unprecedentedly, global gold production also witnessed a surge in 2009.
According to reports, gold production in 2009 climbed up by 144 tonnes with China retaining the numero uno status once again.
This rise has more than offset the drop in output in 2008, caused in part by a temporary slump in production in Indonesia.
China remained the largest gold producer, accounting for 13% of the world’s supply in 2009. It produced almost half as much gold again as Australia, the next largest supplier, and has raised its output by 100 tonnes in the past four years.
South Africa was once the world’s leading gold miner, but its output fell again last year. The decline in supply from America was even steeper. Output rose in all of the other main gold-mining countries, bar Papua New Guinea.
With the world focusing on gold, several analysts have started looking for other metals which will beat the yellow metal in the rice race.
Gold maintained its apparent ability to defy gravity in 2009, helped by a fall in the dollar.
However, gold actually lagged behind other metals in 2009with the metal rising by only 30pc compared with some other metals which doubled in price.
Considering this factor, many market analysts have suggested that copper and nickel are expected to offer attractive returns due to emerging market demand.
The price of nickel fluctuated over the course of 2009 but is expected to increase in 2010. Experts forecast nickel consumption will increase by around 7pc in 2010.
The requirement for nickel is predominantly driven by stainless steel production, which is expected to increase by 8pc this year. But steel may not drive up demand for nickel as clearly as those figures suggest.
The reason for this is that there is a degree of substitution for nickel that has been occurring in the stainless steel industry.
Nickel had a terrific run and there is likely to be a crunch in the nickel market this year. A price increase of between 15pc and 20pc could happen.
Again platinum and palladium are two metals people can put their money on. Factors favouring platinum and palladium is that there have been supply curtailments in South Africa, which produces 80pc of the world’s platinum group metals. This is partly because of a result of power shortages, and because the price has been so low, making about 25pc of all the mines in South Africa uneconomical.
