Platinum prices jump on plans to shut down mines
Platinum prices surged Tuesday after the world's largest producer of the metal said it plans to shut some of its mines.
Anglo American Platinum said Tuesday it will stop production from four mines in South Africa, cutting output by 400,000 ounces per year. That's roughly 6 percent of the world's total supply of platinum, according to the CPM Group.
News reports said mining unions were considering a new round of strikes. An eight-week strike last August crippled the company's operation in Rustenburg, northwest of Johannesburg.
The news of the mine closures and the prospect of more strikes sent platinum prices higher. Platinum for April delivery rose $31.70 to settle at $1,689.90 an ounce, the highest price since October.
That jump put platinum prices above gold prices for the first time since September 2011, according to the CPM Group. Gold for February delivery rose $14.50 to $1,683.90 an ounce.
Until recently, platinum regularly traded at a higher price than gold because of the basic forces of supply and demand, said Erica Rannestad, a commodity analyst at CPM Group. Platinum is more scarce than gold and is widely used in the making of diesel engines. An estimated 80 percent of the world's reserves are found in just one country, South Africa.
"Platinum was always expected to return to a premium," Rannestad said. "It was just a matter of when."
Other metals also climbed. Silver for March delivery rose 42 cents to $31.529.
Copper for March edged up 0.35 of a cent to $3.6375 a pound, while palladium for March increased $10.05 to $713.35 an ounce.
Ongoing concerns about tighter supplies for wheat and corn pushed their prices higher. Soybean futures ended slightly lower.
In March contracts for crops, wheat rose 15.75 cents to settle at $7.8275 a bushel and corn rose 6.5 cents to $7.305. Soybeans slid 4.5 cents to $14.135.
In energy trading, oil fell the most in three weeks as traders turned their attention to the possibility of another big budget fight in Washington. Benchmark crude dropped 86 cents to finish at $93.28 a barrel in New York, the largest drop since Dec. 21.
Other energy prices were mixed:
— Wholesale gasoline fell 5 cents to finish at $2.71 a gallon.
— Heating oil fell 5 cents to finish at $3.01 a gallon.
— Natural gas rose 8 cents to end at $3.46 per 1,000 cubic feet.