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Internal Assessment In Economics - Article Commentary on " Green Curbs Hit Platinum Supply".

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Introduction

Edgars Tarkanijs Internal Assessment In Economics Article Commentary No. 1 (16.11.2002.) Article" Green Curbs Hit Platinum Supply" Source- "http://news.bbc.co.uk/2/hi/business/1998102.stm" Text Commentary About Section "Supply and Demand" Monday, 20 May, 2002, 11:08 GMT 12:08 UK Green Curbs Hit Platinum Supply Carmakers use platinum to curb pollution Growing international pressure for more environmentally friendly cars is threatening to exacerbate a shortage of the precious metal platinum. Soaring demand from the car industry, which uses platinum in catalytic converters to reduce engine emissions, has outstripped supply of the precious metal. Platinum demand has risen in line with the tightening of green legislation both in the United States and in the European Union. A global shortage is likely to remain for quite a while despite a recent sharp rise in output from platinum producers, a leading industry official has warned. Firm prices Platinum is also used for jewelry and in the production of computer memory disks. Global platinum prices have climbed sharply from a low of $406 (�278m) ...read more.

Middle

Though the size of Russia's reserves are secret, they are believed to be massive. However, this does not pose a threat to other platinum producers, Mr. Davison insisted. "Nobody knows what the Russian stocks in these metals are. "But I don't think the Russians are in a position to severely disrupt the platinum market, and it's certainly not in their interests to do so," Mr. Davison said. Industrial commodity Platinum has a much broader industrial demand base than most commodities. Unlike gold, 85% of which is used in jewelry, 55% of platinum output is used in industrial products. Angloplat produces about 40% of the world's platinum supply. Edgars Tarkanijs Internal Assessment In Economics Article Commentary No. 1 (16.11.2002.) Article" Green Curbs Hit Platinum Supply" Source- "http://news.bbc.co.uk/2/hi/business/1998102.stm" Text Commentary About Section "Supply and Demand" Word count: 386 Legislation is an external factor that can affect the demand and supply of certain goods. Demand and supply are also affected by threats of military conflicts and economic system collapses. ...read more.

Conclusion

When the supplied amount is not sufficient to provide the demanded amount of platinum, shortage emerges. In this case suppliers must increase the production so the demanded amount would be provided. Since platinum is a very scarce material and a massive part of the already produced platinum belongs to Russia, which is very conservative in changing its market policy even due to need of stabilizing the world markets, it is very hard for the world producers to increase the supply rapidly. Consumers have a choice- in this case the alternative is to buy palladium, but since the producers of platinum claim a future increase in the supply of platinum, consumers wait for these statements to come true. The stated facts in the article are based on the economic theories and are all in accordance with the theories stated in the Alan Glanville's "Economics From a Global Perspective". Such relations of supply and demand are common market phenomena and are described by economic theories. The scarcity and increasing demand for platinum lead to a logical consequence- shortage and the producers are making the right decision- increasing the supply. ...read more.

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