Platinum Seen Over Worst as Bulls Wager on Automaker Demand – by Eddie Van Der Walt (Bloomberg News – May 16, 2016)

There’s a growing feeling in the platinum and palladium market that the worst is over. After dropping to the lowest in at least half a decade in January, prices since rallied back into a bull market as the outlook for continued low U.S. interest rates reignited the appeal of precious metals.

The two commodities will climb about 20 percent through the end of next year, partly on higher demand from carmakers, according to 12 traders and analysts surveyed by Bloomberg.

The outlook for supply and demand will be key for miners to refiners at the industry’s annual gathering in London this week. Impala Platinum Holdings Ltd., the world’s second-biggest producer, has forecast deficits in the medium to long term as demand for materials used to curb harmful car emissions grows. Investors, who for months sold through funds, have started buying again.

“The fundamentals for platinum in particular are slowly improving,” said Tom Kendall, the head of precious metals strategy at ICBC Standard Bank Plc in London. “We’ve almost certainly seen the bottom of the market for both platinum and palladium.”

Prices Dropped

Prices plunged as much as 48 percent since 2014, hurting mining companies’ profits and forcing some, such as Lonmin Plc, to shutter unprofitable production, cut jobs and seek cash from shareholders.

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