Concerns that rising political tensions in Europe and a mine strike in South Africa could limit the global supply of platinum have sent prices for the metal surging more than 6% this year.
Platinum prices are being driven higher due to worries that sanctions imposed on Russia by Western nations over Russian intervention in Ukraine could eventually affect to platinum exports. Russia is the world’s second largest producer of the metal, behind South Africa. Mine workers in South Africa — which produces 80% of the global platinum supply — have been on strike since January. As the strike drags on platinum supplies are beginning to run low, the Wall Street Journal notes.
Those factors have sent platinum prices up sharply. The most actively traded platinum futures contract has risen 6.3% since the start of this year, hitting $1,462.60 on Friday.
With the crisis in Eastern Ukraine appearing to reignite over the weekend as pro-Russian gunmen seized local government buildings, the prospect of deeper European and U.S. sanctions on Russia are weighing on investors. The current round of sanctions imposed on Vladimir Putin’s government haven’t targeted platinum exports.
Platinum has a variety of uses, including in catalytic converters for vehicles with diesel engines.