Platinum Tumbles On Nissan News But Many Predict Rebound
Undated (AP) _ Platinum futures prices collapsed Thursday after Nissan Motor Corp. announced a catalytic converter that doesn’t use the metal, but the market staged a partial recovery amid skepticism about the invention’s impact.
On other commodity markets, palladium futures surged and other precious metals were mixed; oil futures rose; grains and soybeans were mixed; and livestock and meat futures were mixed.
Platinum settled $20.40 to $20.70 lower on the New York Mercantile Exchange with the contract for delivery in July at $376.70 a troy ounce.
Nissan’s new catalytic converter relies on palladium as an agent to extract poisonous material from exhaust gas, which contributed to a rise in palladium futures in New York.
Palladium futures settled $5.80 to the permitted daily limit of $6 higher, with June up $5.80 at $98.05 an ounce.
Nissan’s announcement shook the platinum market because catalytic converters, the box-like devices beneath cars that transform pollutants into harmless byproducts, account for about 40 percent of world platinum consumption.
Futures prices initially fell the $25-an-ounce permitted daily limit but trimmed those losses on word that the technology would not be available on vehicles until 1994 and rumors it would not pass U.S. or European emmission control standards, and therefore would be used only in Japan.
Analysts compared the event to Ford Motor Co.’s December 1988 announcement that it was testing a platinum-free catalytic converter. Platinum’s price plunged about $100 an ounce on that news but recovered about half its losses within a few months.
″The market certainly overreacted, in my opinion,″ to the Nissan news, said Peter Cardillo, commoditiies trading adviser with Jesup Josephthal & Co. in New York.
″To be honest with you, I think its nonsense,″ he said. ″I think the market will inch its way back to where it was before the collapse.″
Analyst Tom Griffo of Cargill Investor Services Inc. agreed there was reason to be skeptical about the near-term impact. But he said platinum’s days as an automotive component probably are numbered.
″Whether this is going to fly today, tomorrow or 10 years from now, there appears to be a concerted effort afoot to find a replacement for platinum″ due to its high cost.
Gold futures advanced on New York’s Commodity Exchange, erasing most of Wednesday’s losses.
Gold finished $1.90 to $2.50 higher with June at $363.10 a troy ounce; silver was 0.1 cent lower to 0.1 cent higher with June at $4.144 a troy ounce.
Oil futures moved higher on the New York Mercantile Exchange, with refined products leading the way on reports of refinery troubles in France and Venezuela.
Light sweet crude oil was 31 cents higher across the board with July at $21.32 a barrel; heating oil was 1 cent to 1.12 cents higher with June at 56.70 cents a gallon; unleaded gasoline was .23 cent to 1.27 cents higher with June at 68.31 cents a gallon; natural gas was 1 cent lower to 1.9 cents higher with July at $1.338 per 1,000 cubic feet.
Soybean futures rose modestly but grain futures ended lower on the Chicago Board of Trade amid nervousness about crop weather and White House inaction on a Soviet request for $1.5 billion in food aid.
A National Weather Service 30-day forecast released late in the afternoon predicted above-average temperatures and normal to above-normal rainfall for the Midwest during June, which would help corn and soybean development.
Wheat futures settled 3 1/4 cents to 4 cents lower with July at $2.85 a bushel; corn was 1/4 cent to 1 1/2 cents lower with July at $2.43 a bushel; oats were 1 1/2 cents to 2 1/4 cents lower with July at $1.23 a bushel; soybeans were 3/4 cent to 4 1/4 cents higher with July at $5.78 a bushel.
Profit-taking weighed on live cattle futures; pork futures fell sharply as cash hog values continued to drop.
Live cattle finished .08 cent to .30 cent lower with June at 76.07 cents a pound; feeder cattle were .02 cent to .20 cent higher with August at 88.82 cents a pound; live hogs were .17 cent to .90 cent lower with June at 56.90 cents a pound; frozen pork bellies were .55 cent to 1.85 cents lower with July at 57.70 cents a pound.