Platinum could peak at $1,750/ounce

Record high of $400 also likely for palladium

By Maria Varmazis -- Purchasing, 1/23/2008 11:10:00 AM

Ongoing production problems are plaguing key South African supply operations for platinum-group metals at the same time that global demand from automotive catalytic converter makers is elevated. So says a market report by Germany’s Heraeus, which bills itself as the world's largest producer of platinum. Upshot; Platinum will hit a record high price of $1,750/ounce this year. Similarly, the firm says high demand for palladium will drive prices higher towards $400/ounce this year.

The 2007 price average for platinum was $1,478; for palladium, it was $349. The Heraeus price first-quarter forecast for platinum is $1,585, with a full-year average price forecast of $1,510.

Prices for palladium stayed relatively low in 2007, but Heraeus sees increased interest in the metal from both the automotive industry and metals investors. Hereaus expects prices to range between $335 and $465 an ounce this year.