THE price of platinum - for the first time since September last year - overtook gold in intraday trade yesterday.

Platinum's price has risen on concern that output in SA is declining against the backdrop of an improving global motor sales picture. Easing tensions in the euro zone have also served to boost platinum over the past week.

SA is the world's biggest producer of platinum, and along with Zimbabwe has the bulk of the world's resources of the metal.

Yesterday, Statistics SA reported platinum-group metals output falling the most in three months in January because of a strike at Impala Platinum's Rustenburg mine and safety-related shaft closures. Platinum mines produced 20% less of the metal in January, compared to a year ago. Overall mining production fell 2,5% from a year earlier.

The market was slow to react to the strike at Impala Platinum and there had also been the expected recovery in the car sales sector, Justin Froneman, analyst at SBG Securities, said. Despite platinum's surge of over 21% this year, he said he still was not overly positive on platinum. "There's not much fundamental support for it ... there is a lot of metal (platinum) floating around," he said.

UBS analysts have upgraded their demand forecast for European trucks to flat for this year, from a decline of 10% previously.

In late afternoon trade yesterday, platinum was trading at $1698/oz, compared to gold, which was at $1696,30/oz. Bullion has gained 8,4% this year, in its 11-year bull run.

Platinum firms have not fared as well as the metal this year, with Anglo American Platinum, the world's biggest miner, up 3,8%. Impala Platinum, the second-biggest, is down 4,4%.

Northam Platinum has been one of the stronger performers, gaining over 13%.

Improved sentiment towards Europe - with the most immediate risks surrounding Greece having passed for now - has likely lifted some concerns regarding platinum's fundamental picture, UBS analyst Edel Tully said.

derbyr@bdfm.co.za