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. Last Updated: 07/27/2016

Platinum at Record on License Fear

LONDON -- Platinum rose to a record in London on speculation that Russia, the world's second-largest producer, will not approve licenses for the new year, spurring borrowers to tap other sources of supply.

Prices climbed 9.4 percent in the first quarter this year as Russia delayed export quotas, halting shipments until May. The cost of borrowing platinum for one year has risen to 3.82 percent, compared with an average of 3.48 percent in the past 12 months, according to data compiled by Bloomberg.

"There has been nothing yet" out of Russia for new export licenses in 2008, Rory McVeigh, a senior trader at Commerzbank, said by phone from Luxembourg. "Exports could be limited."

Platinum for immediate delivery gained $13, or 0.9 percent, to $1,490 an ounce as of 4:35 p.m. in London after earlier trading at $1,496.50, exceeding the previous high on Nov. 7 by $7. Rates reflect expectations about the amount of metal available for borrowing.

"There is more borrowing in the market," McVeigh said.

The country's platinum output will be unchanged next year at 980,000 ounces, Societe Generale forecast in a Dec. 14 report. Other countries, including South Africa, the biggest producer, will supply 6.29 million ounces, compared with 5.8 million this year.

Prices have climbed 31 percent this year as strikes and accidents disrupted output at a time of increased demand from automakers. Car manufacturers use the metal in catalytic converters to reduce pollution from tailpipes.

The 2:15 p.m. platinum "fixing" price used by some mining companies to sell their production rose $20 to a record $1,482 an ounce.