This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Platinum, Palladium Uptrend to Continue

NEW YORK (TheStreet) -- Platinum and palladium metal prices could continue to increase on supply constraints and on increasing auto sales in China and India.

Over the past three trading sessions, palladium and platinum for spot delivery on NYMEX gained 5.3% and 1.5%, respectively. Tracking the metals' performance, palladium ETF ETFS Physical Palladium Shares ETF (PALL) and platinum ETF ETFS Physical Platinum Shares ETF (PPLT) registered similar gains.

Among stocks, Stillwater Mining (SWC), North American Palladium (PAL) and Platinum Group Metals (PLG) gained 9.7%, 5.4% and 2.8%, respectively.

Palladium group metals (PGMs) production is set to decline because around 8,000 mineworkers at the South Africa-based Northam Platinum will go on strike starting Monday over wage increments. The company did not agree to National Union of Mineworkers' demand for a 15% increase in wages and other allowances. The company produced 321,745 ounces of PGMs in the year to end-June. Supply disruption at Northam will widen the PGM deficit, pushing up the prices.

Unlike other countries, car sales in India have been trending up and are hesitant to take a break despite price hikes. Car sales of Ford (F) grew 220% year-over-year in August, leading the pack of carmakers in India. Other leading car producers Maruti Suzuki, Tata Motors (TTM), Honda Motor (HMC), Toyota Motor (TM) and General Motors registered handsome growth rates of 32%, 45%, 39%, 26%, and 34%, respectively, in August. Several new models, easy financing and booming economy are the prime reasons for the continued outstanding performance of India car sales.

Meanwhile, China surpassed the Indian car market growth rate in August, as China's car sales surged around 56% year-over-year to 1.21 million units. This robust growth can be attributed to the government's incentives for small fuel-efficient cars.

U.S. auto sales declined around 21% year-over-year in August. The year-ago month was an exception since the government's "cash for clunkers" program supported sales numbers. Similarly, car buying in France, Italy and Spain dropped in August as government incentives were phased out.

Sluggish growth in Europe's auto sales will likely have more impact on platinum than on palladium as cars in Europe are mostly gasoline-based, which consume more platinum. However, cars in China and the U.S. - the world's top two car producing countries -- are mostly diesel-based, which use more palladium. Hence, robust U.S. and China manufacturing numbers for August which were released on Wednesday had a greater impact on palladium than platinum.

Stock quotes in this article: SWC, PAL, PLG 
Karvy Global Services (www.karvyglobal.com), a subsidiary of the Karvy group (www.karvy.com), provides specialized research in asset classes including stocks, mutual funds and insurance to leading Wall Street firms.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs