Platinum price soars to 6-month high today as China reported that vehicle sales increased 10% yoy in March. Moreover, Japan's Toyota Motor announced cancellation of production cuts in its plant in France as contraction in Germany's demand could be compensated by other European countries. Moreover, potential listing of platinum and palladium ETF in the SEC also improved platinum demand. The benchmark contract for the white metal surges 2% to 1211, with intraday high at 1220.
According to China Association of Automobile Manufacturers, China's auto sales rose 34% mom in March. Sales of passenger cars (sedans, SUVs and MPVs) surged 27.2% mom and 10.3% yoy while sales of commercial vehicles (buses, trucks and pick-ups) gained 53.2% mom but plunged 5.3% yoy. The encouraging sales figures were driven by the Government's stimulus plans including 5% tax cut on passenger cars with engine displacements of less than 1.6 liters. Sales of this model increased by 21.9% to 1.41M in the first 3 months of 2009, representing 71% of total passenger car sales.
The London-based ETF Securities filed to the SEC and a potential listing indicates investors in the US will soon be able to invest in platinum and palladium ETFs. We believe the structure will be similar to SPDR Gold Share ETF with the physical metals will be held by the trusts.
WTI crude oil trades within a range of 50-51.5 in European morning and near-term outlook remains on the upside as it seems that stock markets have not yet ended its recent rally. In Asia, the MSCI Asia Pacific Index climbed 3.1% while Japan's Nikkei 225 Stock Average advanced 3.7% after a potentially bigger stimulus plan to be announced by the Japanese Government. In European morning, UK's FTSE 100 gains 0.4% while DAX and CAC 40 added 1.1% and 1.3%, respectively.
Gold price trade narrowly today, probably because people seeking safe haven has turned to platinum. Moreover, UK's PPI data once against indicated inflationary pressure has eased further in the country. Output PPI gained 2% yoy in March, less than market expectation of 2.2% and a downwardly revised 3% in February as gasoline price plunged severely during the period. Also in the UK, BOE has announced to keep its policy rate unchanged at 0.5% and the central bank will continue buying government bonds to combat recession.
After the meeting, BOE Governor Mervyn King also cleared the market's doubt that the central bank may not honor the previous pledge that 75B pounds will be deployed in purchase of government bonds within 3 months. The Governor reiterated the central bank's plan is still valid,' since its previous meeting a total of just over 26B pounds of asset purchases had been made and that it would take a further two months to complete that program'.