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Suresh P. Iyengar

Mumbai, June 22 Platinum futures, which was launched by the MCX on Friday, is all set for a downward correction, after prices touched historic-high recently. The metal, more costlier than gold, is priced at Rs 28,964 per 10 grams.

Platinum prices have rallied from $400 per troy ounce in 2001 to its life-time high of $2,301 on March 31. The rare availability of the metal makes it more precious than gold. It is found only 0.003 ppb (parts per billion) in the earth’s crust along with iridium, osmium, palladium, ruthenium and rhodium.

The London Platinum and Palladium market provides the global benchmark prices “London fix”. Other major trading centres are New York Mercantile Exchange, Tokyo Commodity Exchange and Mid-American Commodity Exchange.

The MCX has launched September, December, March and June contracts for trading. Each contract of 500 grams is priced at Rs 14,38,439.

Platinum is used as catalyst in petroleum refining, electronics and scientific apparatus, jewellery, dentistry, pharma and in car exhaust anti-pollution devises. Automotive sector accounts for 43 per cent of the metal’s usage, jewellery 23 per cent and petroleum refining 3 per cent.

South Africa and Russia are the two major platinum producing countries. In other places, it is found as a by-product of iridium, rhodium and nickel. The low recovery of just five parts per million from the earth surface makes it more scarce.

Of the total global production of 6.7 million ounces, South Africa produced 5.29-million ounces, Russia 8.80-lakh ounces and North America 3.45-lakh ounces. Transvaal in South Africa, Urals in Russia and Columbia in US are the major platinum producing States.

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