Platinum climbs above $2,100

London: Platinum set a record high for the 13th straight session on Monday on lingering power problems in top producer South Africa that have hit mining and widened the gap between demand and supply.

The metal, mainly used in autocatalysts and jewellery, has jumped 22 per cent this month, 38 per cent so far in 2008 and nearly 75 per cent in the past 12 months on supply problems in South Africa, which produces 80 per cent of global platinum.

Spot platinum surged nearly three per cent to a high of $2,107 an ounce and was quoted at $2,095/$2,105 at 1138 GMT, against $2,050 in New York late on Friday.

"The supply tightness is likely to continue. One way to alleviate that is by giving the miners sufficient energy so that they could produce, but that doesn't seem to be happening," said Michael Widmer, metals analyst at Lehman Brothers.

"The price rises will likely not be subsiding. The limit is really when enough demand has been destroyed and enough new supply has been coming online so that the market is balanced. And that's going to take time," he said, adding prices could easily rise to $2,500 in six months.

Mines across South Africa have been hit by a lack of power after state utility Eskom asked the mining sector to cut power use to 90 per cent of normal needs to ease a nationwide shortage caused by the failure of electricity generation to match economic growth.

Dim outlook

Analysts said the global platinum deficit could widen to 400,000 to 500,000 ounces by the end of 2008, from about 265,000 ounces in 2007. The market had a surplus of 65,000 ounces in 2006 following seven successive years of deficit.

What this does underscore is just how thin this market is and that any kind of disruption can send it spiralling out of control. Unlike most metals, there's little way of sorting this out sensibly as there's no way of accelerating production.

In other precious metals, palladium jumped to a six-year high of $466.20 an ounce, tracking platinum's rally. But gold and silver eased.

Spot palladium was last quoted at $453/$457 an ounce, up from $444/$449 in the US market, while silver fell to $17.00/$17.05 an ounce from $17.11/$17.16.

Gold rose to a high of $909.25 an ounce before falling to $902.00/$903.10 an ounce, against $903.00/$903.80 in New York. US April gold futures fell $1.2 an ounce to $904.90 an ounce.