The global platinum surplus may jump eightfold after Japan's worst earthquake slashed car production, reducing the country's demand to the lowest level in 28 years, said the nation's top refiner.
Supply will probably outpace demand by as much as 5 metric tons this year, compared with a surplus of 600 kg last year, Shinya Kitaoka, trading section chief at Tanaka Kikinzoku Kogyo K.K., said in an interview. The world palladium shortage may be cut by half, he said.
The surge in supply may curb an advance in platinum prices that climbed 17 percent in the past year. Palladium soared 71 percent. Both metals are used for pollution-control devices in cars and automakers such as Toyota Motor Corp. and Honda Motor Co. reduced production after the temblor and tsunami devastated northern Japan on March 11. The country represents 15 percent of world platinum demand, according to Johnson Matthey PLC.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.