Growing international pressure for more environmentally friendly cars is threatening to exacerbate a shortage of the precious metal platinum.

Jewellery makers use platinum to make pretty shoes

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 jewellery and in the production of computer memory disks.

Global platinum prices have climbed sharply from a low of $406 (�278m) an ounce last October - when confidence in the world economy had been hit by terror attacks in the US.

On 20 May, the metal was trading at about $540 an ounce.

"We would expect prices to remain reasonably firm", said Barry Davison, executive chairman of the world's leading platinum producer, Anglo American Platinum (Angloplat), in an interview with Reuters.

In 2001, the world's platinum producers stepped up output by 11%, but failed to keep pace with demand.

An 8% rise in demand during the year to 6.15 million ounces exceeded supplies, which were limited to 5.86 million ounces, according to the refining firm Johnson Matthey.

This year, South Africa's platinum output should grow by about 10%, the firm said.

Better alternative

In the past, platinum's sister metal palladium has been seen as a viable alternative for use in catalytic converters.

But erratic supplies have deterred many end-users from switching permanently to palladium.

Russia is a major producer of both metals.

The country produces 60% of the world's palladium and is the world's second largest producer of platinum, after South Africa.

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 jewellery, 55% of platinum output is used in industrial products.

Angloplat produces about 40% of the world's platinum supply.