Let me point out that Platinum industrial uses have grown dramatically over the past century and supply is severely restricted. Remarkable difficulties exist in its mining and production, with between 5 and 6 million ounces of new platinum reaching the world market each year, less than 5% of gold production. Estimates of all of the platinum ever mined would fill a room measuring less than twenty-five feet on each side. Mining and refining the metal is an intricate process of extraction that takes about six months.
Platinum’s supply/demand fundamentals are tight. In fact, according to some estimates, were platinum mining to cease today, above ground reserves would last about one year. In contrast, gold reserves would last nearly one quarter of a century. Platinum's supply is tight even during periods of relatively normal mining production. Enough platinum was supplied to world markets last year only after Russia exported considerable amounts of platinum from its shrinking above-ground reserves.
Earlier this year, Platinum supply was severely disrupted in February by a strike at the South African mine run by Impala Platinum at Rustenburg. But after a modest rise in the price, once production has resumed Platinum and indeed all the other metals in the group have fallen. Palladium is down 9% from the February peaks. Why would the PGM complex be subdued if Global Industry was indeed on track for above trend growth. It's relationship with Gold where Platinum has now been trading below the yellow metal since September 2011, shows to me that given the time lag between the mining and the use of the metal that the weak demand is a strong signal that Global Industrial growth in the rest of 2012 will be significantly weaker than the Equity markets are pricing in.