Commodity Futures | Our Services

Precious metals prices moved higher in 1999 for a number of reasons. In late September, the gold market staged a very strong rally as a number of central banks indicated they would limit sales of their gold stocks. With gold in the lead, other metals rallied. Platinum is a precious metal used in jewelry and when gold prices change, platinum prices change in the same direction. Not only does platinum find use and value as a precious metal, it is also an industrial metal with uses in the automotive industry. Palladium is more of an industrial metal finding uses primarily in pollution-control devices. Palladium prices rallied in 1999 and into 2000 as Russia shipments of the metal were slow. Other platinum group metals include rhodium, ruthenium, iridium and osmium. The U.S. Geological Survey reported that U.S. mine production of platinum in 1998 was 3,500 kilograms, up 34 percent from 1997. U.S. mine production of palladium in 1998 was estimated to be 10,500 kilograms, up 25 percent from the previous year. In 1998, the U.S. had only one active platinum-group metals mine located in Montana. Small amounts of platinum-group metals are recovered as by-products of copper refining by two companies in the United States. Most platinum-group metals are consumed by the automotive industry. The metals are used as oxidation catalysts in air pollution abatement devices that remove odors, vapors or carbon monoxide. There are chemical uses for platinum-group metals in processes such as hydrogenation and isomerization. Platinum alloys are used in jewelry. Platinum is finding more industrial uses in electronics and in the glass industry. Demand in the glass industry comes from the need for high quality glass for liquid crystal displays and cathode ray tubes. In the computer industry, data storage disks are often coated with platinum alloys. Iridium is used in process catalysts. There has also been use of iridium in some autocatalysts. Iridium and ruthenium are used in the production of polyvinyl chloride. Rhodium is used in the automotive industry in pollution control devices. To some extent palladium has replaced rhodium but it is expected that more rhodium will be used with palladium in the future. Palladium is a metal that is much in demand. It finds use in the automotive industry in the production of pollution control devices. There continue to be ever lower standards for allowable levels of pollution and as the standards are lowered, the amount of palladium needed to build such devices increases. Some devices that used platinum-rhodium have been replaced by palladium only devices. World mine production of platinum in 1998 was estimated to be 155,000 kilograms, up very slightly from 1997. The largest producer of platinum was South Africa with 125,000 kilograms, unchanged from 1997. The next largest producer was Russia with 17,500 kilograms, unchanged from 1997. Production by Canada was 7,300 kilograms, down 3 percent from the previous year. World mine production of palladium in 1998 was estimated at 125,000 kilograms, up 5 percent from the previous year. South Africa was the largest palladium producer with mine output of 57,300 kilograms in 1998, up 7 percent from 1997. Russian production was 47,000 kilograms, unchanged from the previous year. Canada, in 1998, produced 4,800 kilograms of palladium. World reserves of platinum-group metals are estimated to be 71 million kilograms. The largest reserves are in South Africa. World supplies of platinum-group metals are expected to increase as countries outside of South Africa expand production. These countries include the U.S., Canada and Zimbabwe. U.S. imports of refined platinum in 1998 were 97,200 kilograms. By far the largest supplier of refined platinum was South Africa with 54,000 kilograms. The next largest supplier was the United Kingdom followed by Russia, Germany and Australia. Other suppliers included Switzerland, Belgium and Canada. U.S. imports of refined palladium in 1998 were estimated at 176,000 kilograms. The largest supplier was Russia with 93,400 kilograms, followed by South Africa with 24,000 kilograms. Other major suppliers of palladium to the U.S. were the U.K., Japan, Germany and Canada. Imports of refined rhodium in 1998 were 13,400 kilograms. South Africa supplied about half of these imports with 6,440 kilograms. Other suppliers of rhodium included Russia, the U.K., France and Germany. Imports of iridium in 1998 were 2,060 kilograms. The major suppliers were the U.K., South Africa and Russia. Imports of ruthenium were 9,330 kilograms with South Africa supplying 6,380 kilograms. Other suppliers included the U.K., Russia and Germany. In May 1999, U.S. imports of platinum sponge were 5,860 kilograms (metal content). In the January-May 1999 period, platinum sponge imports were 26,000 kilograms. Imports of other platinum products in May 1999 were 2,440 kilograms while for all of 1999 they were 9,170 kilograms. Imports of platinum waste and scrap in May 1999 were 849 kilograms while for all of 1999 imports were 2,560 kilograms. Imports of unwrought palladium in May 1999 were 5,050 kilograms. The major suppliers were Belgium and South Africa. In the January-May 1999 period, unwrought palladium imports were 89,300 kilograms. Imports of other palladium products in May 1999 were 3,520 kilograms with most supplied by Russia. In the first five months of 1999 imports totaled 9,720 kilograms. Imports of unwrought and other forms of iridium in May 1999 were 427 kilograms. For all of 1999 imports were 974 kilograms. The major supplier was South Africa. Imports of unwrought osmium in January-May 1999 totaled 5 kilograms. Imports of unwrought ruthenium in May 1999 were 1,010 kilograms, supplied by South Africa and Germany. In the January-May 1999 period, unwrought ruthenium imports were 3,680 kilograms. Imports of rhodium in May 1999 were 779 kilograms. The major supplier was the U.K. followed by South Africa. For the January-May 1999 period, imports of rhodium totaled 5,310 kilograms.

See also  Commodity Futures | Our Services

Futures Markets

Platinum and palladium futures and options are traded on the New York Mercantile Exchange (NYMEX). In Japan platinum and palladium futures are listed on the Tokyo Commodity Exchange (TOCOM).