[miningmx.com] – PLATINUM held in the NewGold Platinum Debentures, a Johannesburg-listed exchange traded fund (ETF) managed by Absa Capital, exceeded a million ounces today worth R15.6bn.
Absa Capital said creations totalling 2,800 debentures were backed by approximately 24,000 ounces of platinum. The popularity of the ETF is owing to an expected platinum supply deficit as primary production falls in South Africa.
Vladimir Nedelkjovic, head of ETFs and Index Products at Absa Capital, said the NewGold Platinum ETF comprised 40% of all platinum held in platinum ETFs globally. The next largest platinum-backed ETF is ETF Securities which is listed in the US and is backed by 520,000 ounces of platinum, he said.
All in all, some 101 million NewGold Platinum Debentures have been issued since it was first listed nearly a year ago, on April 23. It comprises about a fifth of South African platinum production which Johnson Matthey estimated in November would total 4.12 million oz for 2013.
Total platinum supply was estimated to be 5.74 million oz in 2013 representing an increase in the platinum deficit to 605,000 oz from 340,000 oz in 2012. Global supply would grow 0.7% or 30,000 oz, with most of the new production from Zimbabwe, said Johnson Matthey.
The platinum price has been relatively stubborn, however, notwithstanding the fact that production from Lonmin and Impala Platinum was virtually at a standstill, while Anglo American Platinum was only producing at 40% of capacity.
According to Kitco, the platinum price is $10/oz weaker than the $1,440/oz it recorded when the Association of Mineworkers & Construction Union (AMCU) took its 70,000 members out on strike on January 23. AMCU’s strike is now into its eleventh week with no prospect of a wage settlement as yet.
“When the platinum price reacts it will probably be a surprise to all of us,’ said Nedelkjovic who also this week launched a palladium-backed ETF.
As of Monday (April 7), some 33,000 oz of palladium will have been absorbed by the NewGold Palladium ETF equal to about R276m, said Nedeljkovic. “We are working with some potential large customers,’ he said of whether Absa Capital’s palladium ETF would enjoy the same success as its platinum counterpart.
“We don’t think it will be as big,’ said Nedeljkovic who added that there was a strong understanding of the platinum market in South Africa given the country was the dominant player in primary production.
