The platinum price rose back above $1,600 an ounce for the first time in two months on renewed concerns over the delivery of ample power supplies to South Africa’s mining industry. Earlier in March, South Africa’s power regulators granted a 24.8% increase in rates to Eskom, its state-owned energy provider, considerably less than the 35% hike requested. Subsequently, Eskom’s management stated that the lack of required funding could hamper expansion plans and result in “extremely tight” conditions from 2011 and beyond which may result in further load sharing and cuts in power to manage the country’s growing demand. The power cuts that were first implemented in the early months of 2008 were largely credited with pushing PGM prices to record highs in the first half of that year. Additional 26% annual rate increases in energy costs granted for 2011 and 2012 will have a significant impact on the profitability of the mines who are already struggling to contain rampant cost escalations for its labor force and mining supplies.
US car sales for February rose 13.3% over depressed February 2009 totals with Ford Motor posting an impressive 43.4% gain mainly due to a sharp increase in fleet sales. Ford sales topped those for GM (+12.2%) for the first time in 50 years, while sales for Chrysler were largely unchanged, up 0.5% for the month. For the first two months of the New Year, sales have risen by 9.9% over comparable 2009 data. On a seasonally adjusted basis, vehicle sales in the US were 10.38 million units, off 3% from previous month totals but more than a million units above February 2009 figures which represented the bottom of this recent cycle. For comparison, adjusted sales for pre-recession February 2008 were at a much higher 15.36 million rate. Toyota’s sales for February which were affected by the recall fiasco dropped by 8.7%, but good gains were reported by both Nissan (+29.4%) and Honda (+12.7%) for the period, year-on-year. Interestingly, North American vehicle production for the month of January doubled from the first month of last year.
