Platinum Strikes to Lead to Reduced World Supply; Special Report by Leading Financial Web Site Penny Stock Detectives

In a recent Penny Stock Detectives article, editor Danny Esposito points out that the platinum belt in South Africa is home to roughly 80% of the world's supply of platinum.

New York, NY (prHWY.com) July 6, 2012 - In a recent Penny Stock Detectives article, editor Danny Esposito points out that the platinum belt in South Africa is home to roughly 80% of the world's supply of platinum. Esposito believes the unions that are proposing new strikes at the world's largest platinum mine, which has an output capacity of 5.5 million ounces per year, will reduce supply dramatically in world markets, leading to higher platinum prices.
Platinum investing is now becoming so expensive that the current price of platinum is not covering the costs of digging it out of mines in South Africa: "The largest platinum miners in the world are complaining that costs in South Africa have increased at least 15% per year over the last few years, while platinum prices have fallen 12% in the last four months," explains Esposito.
He notes that as a result, the largest platinum producers over the last few months have announced mine closures and suspensions of operations at certain mines.
According to Esposito, Canadian-based Eastern Platinum Limited recently announced that it would suspend its development of a platinum mine in South Africa not only due to the strikes, but also due to the weaker price of platinum, making the $100-million platinum venture unprofitable for now.
These closures, suspensions, and strikes have resulted in the first supply decline of platinum in four years, observes the Penny Stock Detectives editor.
Platinum is almost impossible to corrode, even at very high temperatures, which is why it is still considered a precious metal. This property of platinum is also the reason why it is one of the major components found in almost every catalytic converter produced globally, Esposito explains. A catalytic converter is a device that reduces a vehicle's toxic emissions.
He believes that although platinum investing has shifted into other areas, such as solar panels, fiber-optic cables, and electronics, its primary demand comes from the production of the catalytic converter.
As everyone is worried about the global economy, one of the retail sectors of the market to slow first and suffer the most in a recession is, naturally, car sales. If car sales fall, then fewer catalytic converters will be needed, putting pressure on platinum prices and platinum investing, notes Esposito.
"It is reasonable to assume that there will be fewer car sales this year. However, as more mines shut down, the amount of platinum in the world is decreasing faster than demand is falling, which translates into a shortage of the precious metal," says Esposito.
In Esposito's opinion, as platinum investing is unprofitable at current prices, enough production is coming offline that prices will have to rise in order to attract more platinum investing. Furthermore, potential strikes in South Africa could diminish supply even further in 2012, making the precious metal that much more attractive.
"Investors would do well to explore platinum investing," argues Esposito. "The dynamics are such that the precious metal is currently very cheap, as compared to its fundamentals, which presents a great opportunity for the astute investor."
To see the full article and to learn more about Penny Stock Detectives, visit www.pennystockdetectives.com.

The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at www.pennystockdetectives.com.

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Tag Words: precious metal, platinum investing, penny stock detectives

Categories: Business

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