April 4 (Bloomberg) -- Platinum futures in Tokyo rose for a third day amid optimism that gains in oil prices will boost the popularity of diesel-powered cars, which use more of the metal as a catalyst in exhaust filters.
General Motors Corp., the world's largest automaker, has said it is testing more models that use diesel engines to improve fuel efficiency, a sign the U.S. may close the gap with Europe, where diesel powered cars make up about half the total.
Rules mandating the use of emissions filters on vehicles in less-developed countries are also driving demand, Tom Winmill, president of Midas Management Corp., said today in a Bloomberg Television interview. “People are required by law to buy platinum and they are going to bid for those prices at much higher levels.”
Platinum for February 2009 delivery gained 28 yen, or 0.4 percent, to 6,419 yen a gram ($1,945 an ounce) at 1:03 p.m. on the Tokyo Commodity Exchange. The most-active contract jumped to a record 7,427 yen on March 6.
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Metal for immediate delivery fell $2.25 to $1,984.25 an ounce at 1 p.m. in Tokyo, a 0.1 percent decline from late yesterday in New York. The metal traded at an all-time high $2,301.50 an ounce on March 4.
Global platinum demand is about 8 million ounces a year and supply is about 7.3 million or 7.4 million ounces, Winmill said. He manages the $175 million Midas Fund of precious metals.
A typical gasoline car contains about four grams of palladium, a cheaper metal also used as a catalyst, while a diesel car uses about five grams of platinum, according to estimates by Wolfgang Wrzesniok-Rossbach, head of marketing and sales at refiner Heraeus Holding GmbH in Hanau, Germany.
Crude oil for May delivery rose as much as 0.5 percent to $104.35 a barrel in after-hours trading on the New York Mercantile Exchange, before trading at $104.25 at 12:05 p.m. Singapore time. Prices are up 62 percent from a year ago.
To contact the reporter for this story: Dave McCombs in Tokyo at mccombs@bloomberg.net
Last Updated: April 4, 2008 00:24 EDT
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