Zinc

Introduction
Zinc (chemical symbol - Zn) is a bluish white lustrous metal. It is normally
covered with a white coating on exposure to the atmosphere.
Zinc is the fourth most common metal in use, after iron, aluminium and copper in
terms of the metals annual production.
Zinc can be recycled indefinitely, without loss of its physical or chemical
properties.
It is present in a wide variety of foods, and found particularly in association with
protein foods.

Demand and Supply

There was a decrease of 3.5% in the global refined zinc output in 2012 over the
previous year. This was mainly due to a reported 7.5% decrease in Chinas output,
which offset the increase witnessed by Mexico, Peru, United States, Japan and the
Republic of Korea.
Similarly, the global refined zinc metal usage also decreased by 2.80%. This was
primarily influenced by a decrease in demand from all major countries, except India and
the Republic of Korea.

Global Scenario
The major refined zinc exporting countries are Belgium, Canada and the Republic
of Korea, while the major refined zinc importing countries are USA, Germany and China
in 2011.
In 2011, the Chinese imports of zinc contained in zinc concentrates declined by
34% to 821 KT, over the previous year. However, the nations net refined zinc metal
imports increased by 68.5% to 509 KT, during the year 2011.

Indian Scenario

India's refined zinc production was 711,266 metric tonnes (MT) in 2012.
In India, the primary end use of zinc is in the galvanising and coating sectors,
which currently account for an estimated 57% and 16% of the total production
respectively.

Factors Influencing the Market

Zinc prices in India are fixed on the basis of rates that rule in the international
spot market, and Indian Rupee and US Dollar exchange rates.
Economic events such as the national industrial growth, global financial crisis,
recession and inflation affect metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, new uses or the discontinuance of historical uses, unexpected mine or plant
closures (natural disaster, supply disruption, accident, strike, and so forth), or industry
restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes,
penalties, and quotas) affect supply as they regulate (restricting or encouraging)
material flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.
As societies develop, their demand for metal increases based on their current
economic position, which could also be referred as National Economic Growth Factor.

Lead

Introduction
Lead (chemical symbol - Pb) is very corrosion-resistant, ductile, and malleable
blue-grey metal that has been in use for at least 5,000 years.
It is usually found in association with zinc, silver, as well as copper ores.
It is one of the most sustainable and recyclable commodities. It can be recycled

indefinitely, without loss of its physical or chemical properties. Recycled lead accounts
for more than 60% of the total lead production.
The lead production process consumes less energy as compared to the production
of any other metal.

Demand and Supply

In 2012, the global lead mine production increased by 11.5%, over that of 2011.
Global refined lead production increased by 0.22% from 10.594 million metric
tonnes (MMT) in 2011 to 10.617 MMT in 2012.
The worlds refined lead consumption rose to 10.553 MMT in 2012, up from
10.418 MMT in 2011.
India and the Republic of Korea saw an increase in production of 8.9% and 8.2%,
respectively, while India and Japan saw an increase in consumption of 15.6% and
12.2%, respectively.

Global Scenario
In 2012, the global lead mine production was higher in a number of countries
including Mexico, Peru, the Russian Federation and Turkey, however, the increase was
principally due to a reported 20.4% rise in China.
Increased output of refined lead metal in India, the Republic of Korea, the United
Kingdom and the United States were largely balanced by reductions in Australia,
Kazakhstan, Morocco, New Zealand and Spain.
In 2012, despite a further decline in Europes demand for refined lead metal by
2.4%, the global usage increased by 1.3%, over the previous year. This was primarily a
consequence of higher demand in India, Japan, Mexico and the United States. Apparent
demand in China was unchanged from 2011.
Chinas import lead concentrates rose by 26.3% in 2012 over the previous year, to
reach a record of just over 1 MMT.
In 2011, the leading refined lead exporting countries were Australia, Canada and
Germany; whereas the leading refined lead importing countries were USA, UK and India.

Indian Scenario

In 2012, refined lead production was around 169,301 MT.

The main producers of lead are Hindustan Zinc Limited (HZL) and Indian Lead
Limited (ILL).

Factors Influencing the Market

Lead prices in India are fixed on the basis of the rates in the international spot
market, and Indian Rupee and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis,
recession, and inflation affect the metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, new uses or the discontinuance of historical uses, unexpected mine or plant
closures (natural disaster, supply disruption, accident, strike, and so forth), or industry
restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes,
penalties, and quotas) affect supply as they regulate (restricting or encouraging)
material flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.
As societies develop, their demand for metal increases based on their current
economic position, which could also be referred as National Economic Growth Factor.

Aluminium

Introduction
Aluminium (chemical symbol - Al) is the third most abundant element present in
the earth's crust. It exists in a very stable combination with other materials particularly
silicates and oxides.

It is resistant to common atmospheric gases and a wide range of liquids. Hence,

aluminium is known for its durability and high resale value.
Aluminium is a unique metal; which is light weight, strong, durable, flexible, and
impermeable. It is rust resistant and is 100% recyclable.

Demand and Supply

In 2012, global primary aluminium production was 40.974 million metric tonnes
(MMT), up from 39.930 MMT in 2011.
Global primary aluminium consumption rose to 48.075 MMT in 2012, compared
with 44.594 MMT in 2011.

Global Scenario
World primary aluminum production increased in 2012 compared to the
production in 2011, as a result of starting new smelters and restarting smelters that had
been shut down in 2008 and early 2009.
Major aluminium exporting countries are Germany, Russia and Canada, while
major aluminium importing countries are USA, Germany and China.

Indian Scenario
Currently, India is the fifth largest producer of aluminium in the world with an
average annual production of 171,3924 MT.
Indian aluminium industry consists of four primary producers: Hindalco, NALCO (a
Government of India enterprise), BALCO, and Vedanta Aluminium are the four major
aluminium producing companies in India.

Factors Influencing the Market

Aluminium prices in India are fixed on the basis of the rates that rule on the
international spot market, and Indian Rupee and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis,
recession, and inflation affect metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, new uses or the discontinuance of historical uses, unexpected mine or plant

closures (natural disaster, supply disruption, accident, strike, and so forth), or industry
restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes,
penalties, and quotas) affect supply as they regulate (restricting or encouraging)
material flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.
As societies develop, their demand for metal increases based on their current
economic position, which could also be referred as National Economic Growth Factor.

Copper

Introduction
Copper (chemical symbol - Cu) is a malleable and ductile metallic element that is
an excellent conductor of heat and electricity. It is also corrosion resistant and
antimicrobial.
It stands at the third place after steel and aluminium, in the context of
consumption.
Copper is an important contributor to the national economies of mature, newly
developed and developing countries.
Copper is one of the most recycled of all metals. It is our ability to recycle metals
over and over again that makes them a material of choice.

Demand and Supply

In 2011, worlds copper mine production continued to underperform with respect
to capacity, and remained at the 2010 level of 16.005 million metric tonnes (MMT).
In 2011, the global refined copper production was 19.630 MMT, up from 18.998

MMT in 2010. The global refined copper consumption was 19.988 MMT, compared with
19.375 MMT in the previous year.
On a regional basis, refined copper production increased in Africa (11%), Asia
(6%), Europe (4.5%) and Oceania (12.5) but decreased in the Americas (-3.5%).

Global Scenario
Growth in refined copper usage has been especially strong in Asia, where demand
has expanded more than five-fold in less than 30 years.
Major refined copper exporting countries are Chile, Zambia, Japan, Russia and
Peru, while major refined copper importing countries are China, USA, Germany, Italy
and Taiwan.

Indian Scenario
In 2012, India's production of refined copper is 689,312 MT, which is around 4%
of the total world production.
Sterlite Industries, Hindalco, and Hindustan Copper are three major producers of
copper in India. From the status of a net importer, India is emerging as a net exporter of
copper on account of a rise in the production of copper.
Electric and electronic products industry has become India's largest copper
consuming sector, accounting for 36% of the total Indian copper consumption. Telecom
is still India's second largest copper consuming sector, accounting for 20% of the total
Indian copper consumption.

Factors Influencing the Market

Copper prices in India are fixed on the basis of the rates that rule in the
international spot market, and Indian Rupee and US Dollar exchange rates.
Economic events such as the national industrial growth, global financial crisis,
recession and inflation affect metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, new uses or the discontinuance of historical uses, unexpected mine or plant
closures (natural disaster, supply disruption, accident, strike, and so forth), or industry
restructuring, all affect metal prices.
Trade policies set by the Government (implementation or suspension of taxes,

penalties, and quotas) affect supply as they regulate (restricting or encouraging)

material flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.
As societies develop, their demand for metal increases based on their current
economic position, which could also be referred as National Economic Growth Factor.

Mild Steel Ingots

Major Characteristics
Steel is an alloy consisting mostly of iron, with varying amounts of other elements
like carbon, manganese, chromium, silicon, oxygen etc. Different grades of steel are
produced by adjusting the chemical composition and by slight variations in the different
stages of steel-making process. Currently, there are more than 3000 catalogued grades
of steel available.
Steel is one of the most common materials in the world and is a major component
in buildings, infrastructure, tools, ships, automobiles, machines, and appliances. It is
environment friendly, can be recycled and requires considerably less energy to produce
than some other metals.
Steel market is primarily divided into two categories - flat and long.
Flat Steel: Plate or a (hot or cold) rolled strip product. Typical products

are plates, HR coils, HR sheets, CR coils, CR sheets, Galvanised plates (GP),

Galvanised coils (GC), pipes etc
Long Steel: Rod or a bar. Typical rod products are the reinforcing rods

made from sponge iron for concrete, ingots, billets, engineering products, gears tools
etc.

Global Scenario

Global steel production grew enormously in the 20th century from a mere 28
million tonnes at the beginning of the century to 781 million tonnes at the end. Further
progress has been seen in the first decade of the 21st century. The global crude steel
production in 2008 is reported to be 1,330 million tonnes.
Steel consumption of a country increases when its economy is growing, as its
government invests in infrastructure and transport, and the nation sees building of new
factories and houses. Construction industry accounts for around 50% of the global steel
consumption. Cars, which accounts for 13% of the global steel consumption is the
second largest consuming sector.
The main producing and consuming regions of steel have shifted from the
developed world to the developing regions with Asia accounting for more than 55% of
the global steel production. The five largest producers of crude in 2008 are China (500
million tonnes), Japan (199 million tonnes), US (91 million tonnes), Russia (68 million
tonnes) and India (55 million tonnes)
Global steel-making capacity has outstripped consumption in recent years. The
world-wide apparent steel use in 2008 is estimated to be around 1197 million tonnes,
which is down by 1.4% from the 2007 figures. The largest consumers in 2008 are China
(425.7 million tonnes), US (97.5), Japan (76.4), South Korea (58.6) and India (52.6
million tonnes)
Steel is one of the most recycled materials, basically because it is economical to
do so and does not result in any loss of properties. It is estimated that currently over a
third of global steel comes from recycled material. However, recycling rates vary a lot
between countries with Spain and Turkey producing nearly 90% of their steel from
recycled material in 2008, followed by Italy (77%), the United States (64%), South
Korea (52%), Russia/Ukraine (48%) and Germany (45%). The share of recycling-based
production is estimated to be considerably lower in China, India and Brazil.

Indian Scenario
The Indian steel industry has entered into a new development phase from 200506, riding high on a resurgent economy and rising demand for steel. The sharp rise in
production has lead to India becoming the fifth largest producer of steel in the world,
with a 2008 crude steel production of above 55 million tonnes.
The growth phase in India's steel industry is expected to pick pace further. India's
steel consumption is projected to increase annually by above 10% till 2012, fuelled by
demand for construction projects.
The scope for raising the total consumption of steel in India is huge, given that
per capita steel consumption is only 40 kg - compared to 150 kg across the world and

250 kg in China.
The National Steel Policy has envisaged steel production to reach 110 million
tonnes by 2019-20. However, Ministry of Steel has projected that the steel capacity in
the county is likely to be 124.06 million tonnes by 2011-12 itself.
Iron and steel are freely exportable and importable as per current government
guidelines. India is estimated to have exported 4.6 million tonnes and imported 6.6
million tonnes of carbon steel in 2007-08.

Price Influencing Factors

Indian steel prices are largely influenced by the domestic demand and supply
scenario, with major consumption coming from infrastructural development activities.
While, the international price trend strongly influences the domestic price trend,
the domestic prices do not strictly follow any single global market on a daily basis.
Changes in duty tariffs, variations in prices of input materials like iron, coal,
power, freight which influence the cost of production impact the price of steel.
Globally, steel production has outstripped consumption in recent years, despite
capacity utilization being only around 50% in major developed markets like US, EU and
Japan. Demand has fallen in developed countries and the demand from emerging
economies like China, India and Brazil is the only stabilizing factor in the global steel
market currently.
The steel market is influenced by macro-economic factors like strength of the
economy, Government spending on infrastructure, interest rates, currency movements
etc as these factors have a profound influence on public, private and individual demand
for steel.

Nickel

Introduction
Nickel is a metal with a bright future as it is the main alloying metal needed in the

production of certain types of stainless steel.

The strength and life span of products manufactured using stainless steel are
superior to the ones produced using non-stainless steels.

Demand and Supply

World production of primary Nickel during 2011 was 1.612 million metric tonnes
(MMT), up by 11.53% as compared with 1.446 MMT in 2010. Whereas, the world's
consumption during 2011 was at 1.608 MMT vis--vis 1.465 MMT in 2010, up by 9.76%.

Global Scenario
Russia, Canada and Norway are the world's largest nickel exporters accounting for
almost 49% of world exports. On the other hand, China, USA and Germany are the
world's largest nickel importers accounting for around 48% of world imports.

Indian Scenario
The annual demand for nickel in India is around 40,000 MT and its market in India
is totally dependent on imports.

Factors Influencing the Market

Nickel prices in India are fixed on the basis of the rates that rule on the
international spot market, and Indian Rupee and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis,
recession and inflation affect metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, new uses or the discontinuance of historical uses, unexpected mine or plant
closures, or industry restructuring affect the market.
Trade policies set by the Government (implementation or suspension of taxes,
penalties, and quotas) affect supply as they regulate (restricting or encouraging)
material flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.

As societies develop, their demand for metal increases based on their current
economic position, which could also be referred as National Economic Growth Factor.

Tin

General Characteristics
Cassiterite (SnO2) is the most important mineral ore of tin.
Tin is an important commodity in international trade and is used in hundreds of
industrial processes throughout the world.
Utilization is in many industries such as food packaging, culinary equipment,
electronics, tin chemicals, plumbing solders, engineering alloys, pewter and bronze in
music and the arts, dental amalgams, anti corrosion and engineering coatings, wine
capsules and fire retardants. Tin readily forms alloy with other metals and imparts
hardness and strength. Tin is an important component of solders, since it wets the base
metal by alloying with it.
The industrial application of tin is in the following sectors: Solders - 32 %, Tin
Plate - 27 %, Others - 17 %, Alloys - 14 %, P C Stabilizers - 6%, Tinning - 4%.

Global Scenario
The world tin production fluctuates between 2.4 to 3.1 lakh tons. The production
in 2001, is estimated at 2.49 lakh tons.
China (80000 - 1,00,000 tons), Indonesia (54000-90000 tons), Peru (50000 70000 tons), Bolivia (12000 - 15000 tons) and Brazil (12000 to 14000 tons) are the
major producers of tin in the world. These five producers account for around 91% of the
world's total production. The other important producers are Australia, Vietnam and
Malaysia are the other major producers.
United States is believed to be the world's largest producer of secondary tin.
World tin consumption is estimated to have exceeded supply by 15000 tons in

2003.
Japan is estimated to be the largest consumer of tin in the world. The other major
consumers are China and USA.
Globally, the demand is estimated to be above the supply.

Major Tin Markets

The London Metal exchange is the major referral market for futures trading in tin.

Indian Scenario
India's tin production is a meager 10 tons.
India meets most of her tin requirements through imports. It is estimated that
India imports around 4000 tons of tin and its alloys (including scrap).
Tinplate packaging is picking up in the country. The market size of tin plate
packaging is estimated to be around 3,00,000 tons. In India, tin plate is mainly used for
packaging in three categories: edible oil & cashew, processed food and non-food.

Gold supply

Gold is the oldest precious metal known to man and for thousands of years it has been
valued as a global currency, a commodity, an investment and simply an object of beauty.

Introduction
Gold (Chemical Symbol-Au) is primarily a monetary asset and partly a commodity.
Gold is the world's oldest international currency.
Gold is an important element of global monetary reserves.
With regard to the investment value, more than two-thirds of gold total
accumulated holdings is with central banks' reserves, private players, and held in the
form of jewellery.
Less than one-third of gold's total accumulated holdings are used as commodity
for jewellery in the western markets and industry.

Demand and Supply

World investment amounted to 1614 MT in 2012, broadly flat year-on-year, but
the approximate value of this demand reached a new record of almost $87 billion.
Major drivers of this strong investment included further monetary loosening in the
developed world, continued sovereign debt crisis, rising longer-term inflation fears and
in key markets, negative real interest rates coupled with limited attractive risk-free
investment alternatives to gold.
In 2012, the gold mine production increased by 12 MT to 2848 MT and the
combined demand for bars & coins dropped from 1515 MT to 1256 MT.

Global Scenario
London is the worlds biggest clearing house.
Mumbai is under India's liberalised gold regime.
New York is the home of gold futures trading.
Zurich is a physical turntable.
Istanbul, Dubai, Singapore, and Hong Kong are doorways to important consuming
regions.
Tokyo, where TOCOM sets the mood of Japan.

Indian Scenario
India, worlds largest market for gold jewellery and a key driver of the global gold
demand.
The domestic drivers of gold demand are largely independent of outside forces.
Indian households hold the largest stock of gold in the world.
Two thirds of the Indian demand for gold comes from the rural parts of the
country.
In 2012, gold's role as an inflation hedge bolstered its appeal in India. India
imported around 850 metric tonne (MT) of gold in 2012.

Factors Influencing the Market

Above ground supply of gold from central bank's sale, reclaimed scrap, and official
gold loans.
Hedging interest of producers/miners.
World macroeconomic factors such as the US Dollar, interest rate and economic
events.
Commodity-specific events such as the construction of new production facilities or
processes, unexpected mine or plant closures, or industry restructuring.
In India, gold demand is also determined to a large extent by its price level and
volatility.

Silver

Introduction
Silver (Chemical symbol-Ag) is a brilliant grey-white metal that is soft and
malleable.
Silvers unique properties include its strength, malleability, ductility, electrical and
thermal conductivity, sensitivity, high reflectance of light, and reactivity.
The main source of silver is lead ore, although it can also be found associated with
copper, zinc and gold and produced as a by-product of base metal mining activities.
Secondary silver sources include coin melt, scrap recovery, and dis-hoarding from
countries where export is restricted. Secondary sources are price sensitive.

Demand and Supply

In 2011, the worldwide silver fabrication demand was 876.6 million ounces (Moz)
down by 1.5% from the value in 2010, but still reaching its second highest level since
2000.
Globally, in 2011, the physical silver bar investment grew by 67% to 95.7 Moz,

while fabrication of coins and medals rose by almost 19% to an all-time high of 118.2
Moz.
In 2011, silverware offtake dropped by 10.2% to 46.0 Moz from the previous year,
as a result of lower demand in India. Higher prices coupled with ongoing structural
decline in the western markets caused a fall in the Indian silverware demand. Part of
this fall was offset by some gains in China.
The world silver mine production increased by 1.4% to a new record level of 761.6
Moz in 2011, as compared with the previous year.
In 2011, scrap supply rose by 12% over the previous fiscal to a second straight
record of 256.7 Moz, driven by gains in jewellery and silverware recycling on higher
prices.
Government sales fell by a massive 74 per cent to a 14-year low of 11.5 Moz in
2011.The drastic decline was entirely due to a collapse in sales from Russia, where
disposals dropped by nearly 90%.
Notable production losses were observed in Australia, Peru, the United States and
Turkey in 2011, amounting to 20.3 Moz.

Global Scenario
Silver is predominantly traded on the London Bullion Market Association (LBMA)
and COMEX in New York.
LBMA, the global hub of over-the-counter (OTC) trading in silver, is the metals
main physical market. Comex is a futures and options exchange, where most funds
activities are focused.
Silver is invariably quoted in US Dollars per troy ounce.

Indian Scenario
The average annual demand for silver in India is about 2500 Metric tonnes (MT)
per year. In 2011, the countrys production was around 342.13 MT.
Nearly 60% of India's silver demand comes from farmers and rural India, who
store their savings in the form of silver bangles and coins.

Factors Influencing the Market

Economic events such as Indias industrial growth, the global financial crisis,
recession and inflation affect metal prices.
Commodity-specific events such as the construction of new production facilities or
processes, unexpected mine or plant closures, or industry restructuring affect the
market.
Governments set trade policy (implementation or suspension of taxes, penalties,
and quotas) that affect supply by regulating (restricting or encouraging) the material
flow.
Geopolitical events involving governments or economic paradigms and armed
conflict can cause major changes.
A faster growth in demand against supply often leads to a drop in stocks with the
government and investors.
Silver demand is underpinned by the demand from jewellery and silverware,
industrial applications, and overall industrial growth.
In India, the real industrial demand occupies a small share in the total industrial
demand for silver. This is in sharp contrast to most developed economies.
In India, silver demand is also determined to a large extent by its price level and
volatility.

Platinum

Platinum is the rarest of all precious metals. It has several unique chemical and physical
properties that make it essential in a wide range of industrial and environmental
applications. Platinum is also considered as one of the finest of all jewellery metals.

Major Characteristics
Platinum as a pure metal is silvery-white in appearance, lustrous, ductile, and
malleable. It is widely used in several industrial applications as it possesses high
resistance to chemical attack, excellent high-temperature characteristics, and stable
electrical properties.

Platinum is corrosion resistant and is more precious than gold. Platinum's wearand tarnish-resistance characteristics are well suited for making fine jewelry.
Platinum is traded as a commodity with prices determined by market forces. It is
also a widely sought after investment avenue in recent years. However, it is not widely
treated as a monetary base like gold

Global Supply Demand Scenario

The supply of platinum is met by mine production, auto catalyst refining and
jewellery refining with their respective contribution estimated to be 6.15 million ounces,
1 million ounce and 0.9 million ounce in 2008.
The annual production of platinum has averaged around 6.2 million ounces (193
tonnes) in the previous three years from 2006 with more than 90% of the production
coming from South Africa (76%) and Russia. The other producers are United States of
America, Canada and Zimbabwe.
The production of platinum is highly dependent on South Africa's production with
2009 output from South Africa, Russia, USA and Zimbabwe estimated to be 4.7 million
ouces, 0.74, 0.25 and 0.33 million ounces respectively.
The platinum mining industry is very capital intensive and it is reported that
approximately 10 tonnes of raw ore has to be mined to produce just one pure ounce of
platinum.
Unlike other precious metals like gold and silver, there are no large above-ground
platinum stockpiles to protect against significant supply disruptions. Some estimates
predict that existing above ground reserves would last only for a year, if platinum mining
was suddenly stopped.
The demand for platinum mainly comes from auto catalyst, jewellery, other
industrial application and investment. The other industries uses platinum are electronics,
glass and petroleum industry.
The total global demand for this rare metal is reported to be around 7.79 million
ounces in 2008, with consumption by auto catalyst (used in automobiles), jewellery,
investment and other industrial applications estimated to be around 3.8, 1.6, 0.45 and
1.9 million ounces respectively.
North America, Europe, China and Japan are the most important economies
accounting for majority of the global platinum consumption.

World Gold Markets

The London Platinum and Palladium Market (LPPM), which provides the industry benchmark
price

London

fix

Derivative exchanges at New York CME (COMEX), TOCOM (Japan), MCX (Mumbai)
Indian Platinum Market
India's appetite for platinum has been steadily increasing in recent years on
account of the country's economic progress leading to rising industrial demand and
increasing preference for platinum jewellery in urban areas.
India's consumption of platinum in 2008-09 is estimated to be around 932 kgs,
which is expected to rise to around 1200 kgs in 2009-10.
The approximate consumption by various sectors in India is estimated to be
automobile (55%), petrochemicals (25%), jewellery (15%) and electronics & dental
(5%).

Market Moving Factors

Indian platinum prices are highly correlated with international prices. However, the
fluctuations in the INR-US Dollar impact domestic platinum prices and have to be closely
followed.
The global prices are driven by a host of factors with macro-economic factors like
strength of the global economy, currency movements, interest rates, rising importance
of emerging markets being major influencing factors.
Economic situation in major consuming countries like USA, Europe, Japan and
China influence consumption on account to its high demand from industrial sectors,
especially automobiles.
Platinum production is highly skewed with just four mines and two countries
producing almost 90% of the total annual production. Prices are influenced profoundly
by production disruptions, policies taken in producing countries. The influence of this
factor is enhanced by the absence of any significant global stocks of platinum in the
world, unlike that of gold and silver. Additionally, platinum mining is a very capital
intensive industry, which discourages entry of new players.
Any change in global stocks, of which a major portion is present in Russia do
influence prices.
The price movement in other precious metals, especially gold is a major
influencing factor.