Platinum, palladium price react as strikes drag on

Together the South African companies' mines produce 3.5 million ounces in 2012; almost 60% of the world's platinum. South Africa together with Russia control more than three-quarters of world supply.

After a subdued reaction at first – blamed on the huge inventories built up at the largest producers and in Nymex warehouses – the threat of dwindling supply is now pushing up PGM prices, albeit modestly.

The spot platinum price on Nymex in New York rose again on Monday to trade at $1,428.40 after earlier in the day hitting a 3-week high and is now up 4% for the year.

The price of palladium, last trading at $736, has also gained momentum with the metal trading higher for nine straight sessions.

Estimates point to roughly 10,000 ounces of platinum and 5,000 ounces of palladium production lost each day due to the strikes, which does not seem close to resolution.

Implats now says it can supply customers to end of March, but not beyond. The number two producer said the strikes could drag on into May.

"If strikes continue into May, we believe that mines may need to source metal from the open market, or fail to deliver on contracts," a research note by Standard Bank analyst Walter de Wet argued on Friday.

"While this may be bullish, we still believe the metal is available, it is just a question of at what price level holders of above-ground metal will part with their metal," he added.

Read More: www.mining.com/platinum-palladium-price-react-as-strikes-drag-on-22593/