Russia And South Africa To Create OPEC ‘Platinum Cartel’

Tyler Durden's picture

From GoldCore

Russia And South Africa To Create OPEC ‘Platinum Cartel’

Today’s AM fix was USD 1,591.00, EUR 1,243.75 and GBP 1,052.39 per ounce.
Yesterday’s AM fix was USD 1,597.25, EUR 1,241.35 and GBP 1,052.21 per ounce.

Silver is trading at $28.35/oz, €22.27/oz and £18.84/oz. Platinum is trading at $1,576.50/oz, palladium at $756.00/oz and rhodium at $1,200/oz.

Gold fell $5.30 or 0.33% and closed yesterday at $1,599.10/oz. Silver finished -0.38% with a low of $28.62.

Precious Metals and Currencies Table – (Bloomberg)

Gold is slightly lower in most major currencies this morning but is higher in euros and Swiss francs. 

Gold appears to be consolidating near the $1,600/oz level and worries about the euro zone's fiscal health are supporting prices as is the EU’s unprecedented expropriation of bank deposits in Cyprus.

There are hopes that Cyprus will complete capital control measures today to prevent a run on the banks by rightfully nervous depositors. 

Platinum in USD – (Weekly 10 Years) - Bloomberg

Russia and South Africa, which together control about 80% of the world’s reserves of platinum group metals, plan to create a trading bloc similar to OPEC to control the flow of exports according to Bloomberg.

“Our goal is to coordinate our actions accordingly to expand the markets for realization of these metals,” Russian Natural Resources Minister Sergey Donskoy said yesterday in an interview at a summit of leaders from Brazil, Russia, India and South Africa in Durban. “The price depends on the structure of the market, and we will form the structure of the market.”

South Africa mines about 70 percent of the world’s platinum, while Russia leads in palladium, a platinum group metal used in autocatalysts, with about 40% of output, according to a 2012 report by Johnson Matthey Plc.

Palladium rose 0.8% yesterday to $763.50 after Donskoy’s comments, reversing declines to reach the highest level since March 18. Platinum, used to make jewelry and autocatalysts, has risen 2.3% this year because of increased demand from the auto industry and after supply disruptions at mines. The price jumped yesterday in the hour after Donskoy’s comments, narrowing yesterday’s decline.

South African Mines Minister Susan Shabangu confirmed that the two countries aimed to counter oversupply of platinum, and said possible measures could include taxes and incentives.

No ‘Cartel’

“We’re not really controlling the market,” she said in an interview in Durban. “We want to contribute without creating a cartel, but we want to influence the markets.”

Other producers will be invited to join the bloc, which will be similar to the Organization of Petroleum Exporting Countries, Donskoy said. The aim will be to open up new markets rather than limit exports, he said.

Zimbabwe, Canada, and the U.S. are among other major platinum group metals producers.

Russian and South African officials signed a memorandum of understanding today to cooperate in the industry.

“We are now forming working groups to work out joint actions on this market,” and aim to coordinate export volumes, Donskoy said. “There will be a meeting in the summer to discuss mechanisms in detail.”

Anglo American Platinum Ltd is the world’s largest producer of platinum, while Russia’s OAO GMK Norilsk Nickel is the largest producer of palladium globally.

Platinum in USD Adjusted for Inflation (CPI)  – 1970-Today – Sharelynx

Credit Suisse are bullish on the PGM’s of platinum and palladium. They favour them over gold and silver as they say that they are more cyclical and less dependent on investment flows. Therefore they believe that there is more upside likely for platinum and palladium.

We believe that due to the very favourable supply demand dynamics in the platinum market, it should rise well above the inflation adjusted record high from 1980 at $2,700/oz in the coming years from $1,571/oz today.

While gold is down about 5% this year and silver down about 6.5%, palladium is up 7.9% and platinum up 2.2% showing the diversification benefits of having an allocation to the PGM metals.


Gold futures inch higher after 3-day loss streak – Market Watch

Gold stays put as upbeat U.S. data offsets Europe worries - Reuters

Gold Heads for Worst Quarterly Run Since 2001 on U.S. Economy - Bloomberg

Global Pool of Triple A Status Shrinks 60% - CNBC


Invest in Gold or Your Bank Account Could be ‘Cyprused’ – The Daily Reckoning

Whom to Believe on Gold: Central Banks or Bloomberg? – Casey Research

Get Ready: Cyprus Readies Capital Controls to Avert Bank Run - CNBC

Cypriot bank crisis boosts demand for gold – The Telegraph

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
new game's picture

don't ignore this news-very telling of the future...

Edward Fiatski's picture

Oh, come on - profit knows no nationals flags, or borders, nor has it tasted the bean soup that the domicile populace likes to slurp from patriotic TV programmes, and this topic, undoubtedly, will provide fertile ground to talking heads.

Forward, Soviets! Platinum rations remain at 0% per head, but your Oil share has increased from 0.00000001% to 0.00000000000000003%.

glenlloyd's picture

I wonder if Russia is rationing Polonium yet?

philipat's picture

And in response, the price of Platinum is......down. It seems that the "Markets" trust the Russians, Chinese and South Africans to do a responsible job of "Managing the markets"??

Nothing makes sense any longer......

Fuh Querada's picture

Yeah - supply and demand estimates - a bitch. And in CRIMEX markets Bernbanker and JP Morgue can create an unlimited paper supply. Rick the Dick Rule came on pimping the Sprott Pt and Pd ETP after the price had gone up 20%. Nothing changes. A good story of deception in the commodity markets was in a 60s book called "The Money Game" with cocoa.

schatzi's picture

Meh, South Africa thinks it's a BRIC, yet gets abused like a Chinese colony for as long as the politicos enjoy the ride on the gravy train.

Winston Churchill's picture

Agreed.hard to see what they bring to the table currently.

That could change massively in a gold backed RC scenario though.

Dewey Cheatum Howe's picture

Not to be racist but name me one country in Africa that has had any really prosperity for the locals as a whole when run by the natives. We see how well that worked out for South Africa when they handed over the reins.

BandGap's picture

Paper money backed up by a basket of precious metals.

Chile and Micronesia are getting together to establish a tuna cartel.

Waterman Jim's picture

looks like south africa will be trading platinum for russian oil.

Mr. Hudson's picture

Food. Food is where it's at. Screw metals. With what's comimg, the Bible prophecy "They'll be throwing their gold and silver in the streets" is coming true, and I'm not a Bible thumper.

disabledvet's picture

Ah "the glory daze." what other cartels we got waiting in the wings? "a banking cartel"? How about a North American oil cartel? Shall we try a US Canadian food cartel? "don't worry we'll cover distribution too." start buying GM shares...

Anasteus's picture

Unnoticed platinum gaining deserved attention?

Good news for COMEX... after all, who cares? It's just a sideshow for dummies.

Cacete de Ouro's picture

Meanwhile in other news, the BIS has created a cartel to control the gold price. The G10 central bank governors were said to be ecstatic as they went for a beer in Le Grand Hotel Les Trois Rois, but moving on to a country chateau where they dressed in strange red robes...

MrNude's picture

Aka Russia and China set up a ‘Platinum Cartel’  With SA as the proxy                    


China has been pulling the strings in SA for some time now.

Anasteus's picture

The power is gradually but remarkably shifting to the East these days... interesting.

Seems like they are again baking something.

orangegeek's picture

Russians push prices higher with Cartel.


Exploration expands.


flyme's picture

Monopolies, new game in town.

Platinum_Investor's picture

This is positive for all metals I would think not just platinum.  So, so many positive reasons to buy metals right now.  Most of all is Fed Balance sheet will hit $4 trillion by end of this year.

Stuck on Zero's picture

Specially engineered nanomaterials made from carbon, iron, and silicon are starting to eat into the PGM catalyst market.  Nano materials can be configured to present almost any kind of surface property from which to promote a chemical reaction.  Once a mechanism is established production can be carried out quite cheaply.  Raising the price of the PGMs will only accelerate these developments.


akak's picture

Perhaps, but I can't help but notice that the price of platinum was near or above that of gold for at least a full century prior to the widespread use of platinum in automotive catalysts in the 1970s, so I would not be so sure that the decline of what happens to be platinum's major use today is going to radically affect its price in the future.

I'm still waiting for the ongoing steep decline in print photography to take silver's price back below the $4/oz it was in 2001.

r3phl0x's picture

Photography accounted for only 6% of the yearly silver demand in 2011. Even if it went to 0 overnight, it would not drive the price to $4/oz.

Dewey Cheatum Howe's picture

It is not just mining.

The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund.

The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.

“The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. “There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.”

The BRICS nations, which have combined foreign-currency reserves of $4.4 trillion and account for 43 percent of the world’s population, are seeking greater sway in global finance to match their rising economic power. They have called for an overhaul of management of the World Bank and IMF, which were created in Bretton Woods, New Hampshire, in 1944, and oppose the practice of their respective presidents being drawn from the U.S. and Europe.

“We need to change the way business is conducted in the international financial institutions,” South African International Relations Minister Maite Nkoana-Mashabane said in a March 15 speech in Johannesburg. “They need to be reformed.”

The U.S. has failed to ratify a 2010 agreement to give more sway to emerging markets at the IMF, while it secured Jim Yong Kim, an American, as head of the World Bank last year over candidates from Nigeria and Colombia.

Finance ministers and central bank governors from the BRICS nations, who met in Durban today, agreed to set up currency crisis fund of about $100 billion, Brazilian Finance Minister Guido Mantega told reporters today. He didn’t give details of proposed funding for the new bank, which Brazil wants established by 2014. The nation’s leaders are due to sign a final accord tomorrow.