Ospraie’s Anderson sees platinum deficit by 2012

Nov 18, 2010 | 01:10 PM | Meredith Mazzilli

The platinum market may be in a deficit within two years as production peaked some four years ago and demand is only set to grow, Ospraie Management LLC managing partner Dwight Anderson said Thursday.

While the entire precious metals complex will enjoy a "great macro tailwind" as a result of currency aversion, investment and industrial demand, Anderson said platinum is the most supply constrained.

"As far as platinum goes, peak production has already occurred," Anderson said at ETF Securities' Annual Precious Metals Conference Thursday. "Other than small alluvial deposits, the only area you find it is in South Africa."

Platinum production peaked in 2006, Anderson said, and since then production of new platinum has slid some 15 percent. This could result in a market deficit by as early as 2012.

"In a world of flat to potentially even declining production, the market will be moving into a deficit," Anderson said. "The quality of the world's biggest mines are falling as these mines age. They contain less and less platinum, and these fewer ounces are also deeper and deeper underground." ....