Although so far platinum and palladium prices have not exactly rallied in the midst of South African strikes it is thought that prices will rise if the strike continues.
The strikes revolve around pay as The Association of Mining and Construction union demand the basic salary to be up to 12,500 rand which said to be “totally unaffordable”.
South Africa is prevalent in the global platinum production with the country providing 75% of the annual mine supply and also being one of the largest palladium producers also.
The strike began on January 23rd 2014, however the apparent unrest has been simmering since the deadly violence at the Marikana mine in 2012.
The strike didn’t lead to an initial price rally as many investors could see there was enough platinum around to satisfy demand. Although as the strike continued it has and will become more apparent that a lack of metal for consumers could exist on the horizon.
Whilst it is not clear when the market could run dry, there are concerns about this realising in the not so distant future, even more so if the strike continues.
For now investors are becoming more and more bullish for precious metals, seeing as gold has been enjoying 17 week highs and silver is also trading higher today.