Spot platinum fell almost 4 percent to a one-week low of $1,418.50 per ounce on Monday on renewed concerns about demand for the white metal, while a sell-off in Asian stock markets helped undermine sentiment. Some automakers facing financial difficulty appeared to have stepped up sales of platinum from their stocks in the past few months, resulting in a supply glut in the cash market, traders said.
The bulk of the world's platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals. It is also used to make jewellery.
Platinum's cash price pared earlier losses and stood at $1,438.50/$1,458.50 per ounce as of 0747 GMT, compared to late New York levels of $1,474.50/1,494.50. Yen-based platinum futures on the Tokyo Commodity Exchange were also hit, with the key August contract falling more than 3 percent to 4,893 yen per gram at one stage. The contract ended Monday at 4,985 yen, down 90 yen from Friday's close.
"The TOCOM market was sold again," said a Japanese trading house source. "It's vulnerable because the cash market remains under pressure from oversupply. Some in the market think that automakers are now on the supply side," he said.
Earlier this month spot platinum briefly fell below $1,300, to its lowest intraday level since mid-September, amid concerns about waning demand from automakers. A bearish outlook for platinum was also underlined by weak Japan automobile sales data.