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(Kitco News) - So far, the platinum market has largely looked beyond an illegal strike at Impala Platinum and, with other precious metals, focused on macro events, says UBS. However, the strike could last for some time, since rehiring and retraining takes time. “Our takeaway is that the potential for platinum to attract a South African premium is getting higher, and the same applies for rhodium,” UBS says. Implats puts lost production from Rustenburg-related stoppages at 3,000 ounces of platinum per day, which UBS says will reduce a market surplus this year that it previously estimated at 270,000 ounces. The strike is three weeks old, and UBS notes that typically producers maintain stocks equal to one month of supply. The strike could end, or else Implats’ clients could opt to defer or reduce deliveries. Still, “the longer this strike goes on, i.e., the longer Implats loses 21 koz a week, the greater the potential for it to start impacting supply contracts with end-users,” UBS says. The bank later adds: “The longer a strike continues at Rustenburg, the greater the potential for a reaction in price.”
By Allen Sykora of Kitco News; asykora@kitco.com
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