In fact, despite public anger over gas prices, the oil/crude relationship has grown so out of whack that many refiners will be facing
negative crack spreads by year-end if something doesn't budge. (For what it's worth, less gas means less ethanol too.)
High gas prices also mean consumers pay attention to fuel economy, so they might buy a more efficient car. That's the first platinum hit: burning less gas means you need a smaller catalytic converter.
But then there's the second-order effect - if you're a consumer feeling pinched by $4 gas, you're probably also feeling pinched at the idea of a $40,000 car. So car sales plummet, which is just what we've seen. This oil impact isn't just keeping new U.S. SUVs off the streets. In Germany, car sales in general (counted by registrations) were down 14% in just one month. Even sales in China are slowing down.
The oil-train isn't the only thing holding down platinum. Demand for jewelry heading into the second half of the year doesn't look promising. Web-jeweler Blue Nile, for instance, is reporting a "trading down" trend: People are still buying that certain something, they're just doing it on the cheap.
Which brings us back to platinum, of course, because "cheap" generally doesn't mean platinum. The latest comScore report shows online jewelry sales down 10% in the second quarter of 2008 - at the same time online retail sales overall grew 13%. And platinum demand...
Polishing Tarnished Goods
Platinum's precipitous plummet has created a new set of opportunities, however - acquisitions. In what is truly a classic hostile takeover bid, Xstrata plc, the British mining conglomerate, has been buying up shares of Lonmin Plc, the world's third-largest platinum supplier, as part of a $10 billion play.
