Production of Platinum in 2017 rose +4.7% yr/yr to 200,000 kilograms remaining below 2006 high of 218,000 kilograms a record high. South Africa is the world’s largest producer of Platinum with 70.0% of world production in 2017, then Russia 10.5%, Zimbabwe 7.5%, Canada 6.0% and the U.S. at 2.0%. World production of Platinum group metals other than Platinum and Palladium in 2015 (latest data available) rose by +34.3% yr/yr to 69,300 kilograms, but still below the 2007 record high of 79,600 kilograms.
U.S. mine production of Platinum in 2017 rose +0.3% yr/yr to 3,900 kilograms, but still below the record high of 4,390 kilograms posted in 2002.
Demand data is no longer available but in 2004 the total of Platinum-group metals sold to consuming industries in the U.S. was 91,434 kilograms. At that time the two main U.S. industries that use Platinum are the auto industry, which accounted for about 74% of U.S. Platinum usage in 2004 and jewelry industry, which accounted for about 26% of U.S. Platinum usage.
Based on this data and Technical’s, in my opinion, Platinum can potentially rally to 975 and potentially 1000 from here, last as of this writing trading 873.0 on the July 2019 futures contract.
Consider buying Call options on the July 2019 futures contract, the July 920/1000 call spread cost 9.9 = $495.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade. The July 940 Call cost 11.60 = $580.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade.
For a contrarian view and downside protection the July 820 put cost 9.00 = $450.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade.
The July 2019 Futures contract is the underlying for the July 2019 Options which expire in 109 days 6/19/2019
To discuss any strategies feel free to call 888-391-7894 or email me peterori@walshtrading.com
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