The Name derives from platina – the Spanish word for silver – because of its white-grey color. The history of platinum is quite a short one, compared to gold and silver, because first in 1856 the chemist and pharmacist Wilhelm Carl Heraeus succeeded to melt platinum in an oxyhydrogen flame, which consequently led to an improved usage.
Platinum is a rare metal, exhibits a high boiling point and can be deformed easily. Platinum possesses a high resistance against air, water and specific acids. A very hard and temperature-resistant structure is given in an alloy with iridium – another metal from the platinum group. The Parisian prototype meter and the prototype kilogram are therefore in such a platinum-iridium alloy.
Platinum is the principal metal of the six-metal group that bears its name; the other platinum group metals are palladium, rhodium, ruthenium, osmium, and iridium. All possess unique chemical and physical qualities that make them vital industrial materials.
Platinum is by far the most expensive metal of the four noble metals with prices above 1,000 Dollar per troy ounce (oz.). The reason for this lays in the globally limited deposits and the comparatively sophisticated methods of extraction. It needs 10 tons of ore and a refinement-process of 5 months, just to get one ounce of platinum with a purity level of 95 % – the customary standard in Europe and the U.S.A.
Jewelry creates the largest demand for platinum, accounting for 51 %. Automotive catalysts take 29 % and chemical and petroleum refining catalysts, 13 %. Platinum is also used in the computer industry and in other high-tech electronic applications since it is an excellent conductor of electricity, does not corrode, and has a low reactivity with other metals. This sector accounts for about 7 % of consumption. With a share of 0.1 % the production of fuel cells is still relatively unimportant for the consumption of platinum. But in 2015 the platinum production in this sector shall increase up to 10 %.
Most important platinum producer is South Africa with a market share of 74.8 %. The Bushveld-complex in South Africa’s north-east is a 66,000 square kilometer big area that holds the world’s biggest platinum reserves. The two most important platinum producers – the Anglo Platinum and the Impala Platinum – are also extracting here. The second most important producer is Russia with a market share of 16.8 %. Above all, the Russian mining corporation Norilsk Nickel is ruling the market here. The remaining market shares of the platinum production are found with Canada, the U.S.A. and the rest of the world. Mere platinum mines are above all located in South Africa; otherwise platinum accrues mainly as a by-product at the extraction of non-ferrous metals. Only about 15 % of the annual production comes from the recycling of platinum scrap.
The demand for platinum exceeds the supply already since years and could only be gratified through an enhanced extraction of Russian deposits.
Platinum is among the world’s scarcest metals; new mine production totals approximately only 5 million troy ounces a year. In contrast, gold mine production runs approximately 82 million ounces a year, and silver production is approximately 547 million ounces. Supplies of platinum are concentrated in South Africa, which accounts for approximately 80% of supply; Russia, 11%; and North America, 6%.
Platinum and palladium have very similar characteristics in relation to conductivity, processing and effect in connection with other chemical substances. The industry can therefore use the cheaper palladium as substitute for platinum at a platinum shortage and its consequently high prices. Only exception: The jewelry industry.
Because of the metal’s importance as an industrial material, its relatively low production, and concentration among a few suppliers, platinum prices can be volatile. For this reason, it is often considered attractive to investors and speculators who are pursuing a profitable return on investment.
Platinum futures are traded among others at the COMEX Division of the New York Mercantile Exchange (NYMEX / COMEX Division).
Most important stock exchange centers: NYMEX Comex Division (recently rebranded CME Globex, after a merger between Chicago Mercantile Exchange and NYMEX), CBOT (Chicago Board of Trade), LPPM (London Platinum and Palladium Market), Tokyo Commodity Exchange.
Price quotation: U.S. Dollars and Cents per troy ounce (oz).
Contract-cycles: There are platinum futures contracts with expirations all twelve months of the year, but the primary months are January, April, July, and October.
Contract-size: 50 oz.
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