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Tuesday February 8, 12:38 pm Eastern Time

RPT-FOCUS-Palladium sets new high at fix

(Updates with afternoon fixing prices, analyst comment)

By Martin Hayes

LONDON, Feb 8 (Reuters) - Palladium continued to climb on Tuesday as strong industrial demand and scarce supply drove prices to an all-time fixing high of $567.00 an ounce, traders said.

On Monday afternoon palladium had been fixed at $540.00, itself a record high. Since the start of the year prices have risen over $120, or nearly 28 percent.

``You have to look to Moscow, really. It is like a stuck record at the moment -- they are not supplying enough,'' one trader said.

The Russians supply around 70 percent of the world's annual palladium needs and 20 percent of its platinum, but internal bureaucracy has delayed shipments to the west, where demand from the automobile industry for catalysts continues to boom.

Uncertainty persists over when Russia's acting President Vladimir Putin will sign long-awaited export quotas, particularly as the political scenario in Russia is dominated by the presidential election slated for March.

``They are not selling palladium at previous rates, but the demand is still there at previous rates,'' the trader noted.

Buying was evident at the London morning fix, the first of two daily sessions that establish benchmark prices. European gains were spurred by strength in Asian markets.

TOCOM palladium futures surged by their daily limit, tracking sharp gains in New York overnight and the yen's decline against the dollar.

Platinum was fixed at $515.00 an ounce, which was below the $522.00 fixing of Monday afternoon as the two main platinum group metals diverged. The platinum market is not so dependent on Russian metal.

``Palladium continues to barrel higher in a panic buying frenzy; platinum, however is more sedate and is giving back some of its recent gains,'' analyst Rhona O'Connell of T. Hoare Canaccord said in the broker's daily report.

PALLADIUM EYES $600

The relentless bull run in palladium is likely to continue as no substitutes for the platinum group metals have been found for making autocatalysts. The next price target is $600.00 an ounce, analysts said.

Palladium deliveries from Russia have been held up in the first half of each year since 1997. With strong industry demand, concerns about Russian supply pushed palladium up from $120 an ounce in early 1997.

``At some stage the bubble will burst, but only when there is more than a trickle of metal,'' the trader said.

-- Homer Beanfang (Bats@inbellfry.com), February 08, 2000

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Tuesday February 8, 2:04 pm Eastern Time

Platinum futures jump the $500 threshold in NY

NEW YORK, Feb 8 (Reuters) - NYMEX platinum futures soared amid acute supply-demand imbalances on Tuesday, following surging sister metal palladium and exceeding the $500-an-ounce level for the first time since mid-1990.

At 1355 EST the active April platinum was quoted at $500.00 an ounce, up $25.70 an ounce and just off a contract high of $502.00. On a spot continuation basis, it was the highest platinum futures price since May 1990.

The early afternoon surge accelerated an orderly early platinum advance and lagged an even more explosive palladium rally to record highs.

Industrial buying has recently grown frantic in both platinum and palladium, used mainly to clean vehicle exhausts.

But palladium is a more efficient autocatalyst than once-preferred platinum and has been leading the move higher.

At the same time Russia, which produces 20 percent of all platinum and 65 percent of palladium, has failed to deliver enough metal to meet demand in the West.

``This market is at the mercy, at the fiat, of somebody else across the world,'' said Ralph D'Esposito, of RJ Futures.

March palladium was up $36.10 at $577.00 an ounce, having touched a new intraday high at $580.

In London, spot platinum was fixed in the afternoon at $515 an ounce and was quoted late in New York at $527.00/$531.00. Palladium was fixed at a new all-time high of $540 and was quoted at $574.00/$579.00.

-- Homer Beanfang (Bats@inbellfry.com), February 08, 2000.

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Tuesday February 8, 6:32 am Eastern Time

FACTBOX-Platinum group metal supply and demand

LONDON, Feb 8 (Reuters) - Current record or near-record levels in platinum, palladium and rhodium are mainly due to an absence of deliveries from major supplier Russia.

Following are tables of supply and demand for the three metals from precious metals refiners Johnson Matthey Plc's Platinum 1999 Interim Review published in November 1999.

PLATINUM: Supply and Demand: '000 oz: Supply 1998 1999 South Africa 3,680 3,820 Russia 1,300 800 Others 420 440

------------------------------------------- Total supply 5,400 5,060 Demand 1998 1999 Autocatalyst: gross 1,820 1,750 (recovery) (405) (430) Jewellery 2,410 2,730 Industrial 1,250 1,340 Investment 315 200 ------------------------------------------- Total demand 5,390 5,590 Movements in stocks 10 (530) ------------------------------------------- ------------------------------------------- PALLADIUM: Supply and Demand: '000 oz: Supply 1998 1999 South Africa 1,820 1,890 Russia 5,800 5,000 Others 780 780 ------------------------------------------- Total supply 8,400 7,670 Demand 1998 1999 Autocatalyst: gross 4,390 4,890 recovery (175) (200) Dental 1,230 1,160 Electronics 2,070 1,840 Other 580 610 -------------------------------------------- Total demand 8,095 8,300 Movements in stocks 305 (630) --------------------------------------------- --------------------------------------------- RHODIUM: Supply and demand: '000 oz Supply 1998 1999 South Africa 400 394 Russia 110 80 North America 16 18 Others 4 8 ------------------------------------------- Total supply 530 500 Demand 1998 1999 Autocatalyst: gross 483 508 recovery (57) (66) Chemical 31 34 Electrical 8 8 Glass 34 30 Other 10 11 ------------------------------------------- Total demand 509 525 Movement in stocks 21 (25)

Source: Johnson Matthey Plc Platinum 1999 Interim Review.

-- Homer Beanfang (Bats@inbellfry.com), February 08, 2000.