Platinum

Description

Platinum is the best known and most widely used of the PGMs. It is a very heavy silver-white metal. Platinum is soft and ductile, and has a high melting point and good resistance to corrosion and chemical attack. The metal's surface remains bright even after being brought to white heat in air but it readily dissolves in aqua regia (a mixture of hydrochloric and nitric acids) which is commonly used in the processing of platinum.

Major sources of supply

• South Africa is the major source of supply, accounting for almost three quarters of the world's platinum production

• Russia is the second largest producer, although Russian sales are volatile and subject to political intervention

• Emerging producers include Zimplats, which at feasibility designed production is expected to account for 3% of world production.

Major applications

• Platinum demand in jewellery is dominated by Japan but growing markets include China and the USA

• Platinum, together with palladium and rhodium, is used in catalytic converters for vehicles to reduce the levels of pollutants emitted in exhaust gases

• Platinum is widely used in industry as a catalyst (e.g. petroleum refining and fertilisers) and in the glass and ceramic industries.

Historical prices

Platinum traditionally followed the gold price and traded at a small premium (less than $50 per ounce). Fundamental supply and demand factors have recently become more influential than the gold price. A prolonged interruption in Russian supply led to an increase in the platinum price during early 1997. Following the Asian crisis in the late 1997, it has been market's perception that Japanese jewellery demand is vulnerable which has impacted the price.