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WHY IS THE PLATINUM PRICE SO HIGH?
 Platinum is different from gold in that the demand/supply balance is tight. There are no substantial above-the-ground stocks of platinum available to meet increased market demand.
The underlying increases in the platinum price witnessed over recent years stem mainly from growing industrial demand for platinum, but also supported by continuing demand from the jewelry industry, especially in the bridal category.
As the outlook for the US economy and dollar weaken, speculator and investment fund interest in commodities, notably gold and platinum, together with the advent of ETFs (Exchange Traded Funds) in platinum, have additionally affected the price.
Recent production issues in South Africa, have led to decreases on the supply side:
An increased focus on safety has led to re-training and temporary shaft closures and thus lower production
Expansion programs have been frustrated by a shortage of skilled labor
The reason behind recent highs was the February 08 announcement by Eskom, the state-owned monopoly who are responsible for the electricity supply in South Africa, that they were unable to meet their contracts, and the outlook for adequate supply to industry was uncertain. However, Eskom subsequently announced that it would supply to the mines 95% of capacity, up from the previously quoted 90%.
Commentators and analysts suggest the market has moved from a slight over supply into deficit resulting in continued investor interest in the sector.
WHAT ARE THE SOUTH AFRICAN PLATINUM PRODUCERS DOING?
The producers are working closely with the government in South Africa and with Eskom to seek ways of ensuring maximum production under the current conditions. These discussions led to the most recent supply commitment from Eskom.
The producers continue to look to expand production, within the constraints imposed by the energy situation and labor shortages.
The South African producers who support PGI recognize the challenges that the shortage presents to the jewelry industry, and have restated that their 33 year investment will continue to provide support to the platinum jewelry industry through PGI.
WHAT IS PGI DOING?
PGI continues to support the platinum jewelry industry with the highest ever level of investment and strong teams in each of the major platinum jewelry markets.
Multi-million dollar marketing and trade programs to drive customers into stores and educate sales associates on how to sell platinum's value.
Recognizing that in these circumstances, a commitment to marketing and specific support for the retailers and manufacturers is more important than ever, please contact Huw Daniel, President or Jenny Luker, SVP Industry Relations PGI USA, to find out how we can be of support to you.
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