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* Platinum price reaction to strike milder than expected
* Stock estimates range between 4 mln and 20 mln oz
* No data available for total stocks in Zurich free zone
By Silvia Antonioli and Clara Denina
LONDON, June 25 (Reuters) - Underground vaults next to aSwiss farming village may reveal one reason for the platinummarket's indifference to its biggest ever supply shock.
Most analysts and market players expected steep priceincreases for the precious metal as a record five month miningstrike in South Africa, which ended on Tuesday, wiped out some40 percent of global supply.
Yet values have been stuck in a $140 an ounce range gaining just five percent so far this year.
Estimates of total platinum stock value vary by billions ofdollars, mainly because of uncertainty over how much metal isstored in off-shore vaults.
The Zurich Freilager, or freezone, has been used since the1920s to store valuables, but very little is known about whatgoes and out of the industrial park, advertised by preciousmetals brokers for the high level of privacy it offers.
Its vaults alone could hold around 20 percent of the totalstocks of platinum in London and Zurich, the world's two maintwo storage centres for the metal, market players said.
"Miners, refiners, investors, trade houses: they all holdstocks there," a German trader close to the car industry said.
He and other sources in the industry, the main consumer ofthe metal for catalytic converters, said this was a major reasonprices did not shoot up with the strike.
"Every company knows how much it has but not how much theothers have. But users know that there is metal there andtherefore there was no panic buying," the trader said.
Storing metal in bonded warehouses is routine practice amongpurveyors of commodities and the companies involved have notcome under the kind of international pressure for moredisclosure felt by Switzerland's famously secretive banks.
The Swiss Federal Department of Finance (FDF), however,voiced concern over the Freilager system in a consultation paperin 2012 that is expected to lead to some reforms by the end ofthis year. Among issues it raised was the ease with which thestored goods can be sold in the vaults without tax consequences.
In April, the Swiss Federal Audit Office noted thewarehouses' role in easing trade but asked the government topresent a more comprehensive plan for them by the end of 2015"that takes the economic and political stakes into account".
Its report noted issues such as "errors relating to thecustoms tariff, declaration of origin when declaring goods;inventory irregularities; a lack of traceability of themerchandise; and flaws in stock accounting".
The Swiss Union of Freeports which represents the industrywas not immediately available to comment.
PRIVACY
Freilager's tax-exempt status means any platinum storedthere does not appear in official import/export data and fewpeople get to see it, let alone assess how much is there.
Mark O'Byrne, director of precious metals brokerageGoldcore, visited an underground vault there in 2008 and saw 1kgand 6kg bars or platinum. But it was not stored by itself."There were a large number of pallets on which were piled anarray of gold, silver, platinum and palladium bars," he said.
While small holders might share a vault with others,medium-large companies would normally have their own.
Zurcher Freilager AG, the company named after the free zonearea in which it lets space for storage, said that whatcompanies store in rented premises was "beyond our knowledge".
It declined Reuters access to their facilities.
"We don't ... give information about clients' business andthe facilities of our company," chief financial officer FrankSmits said in an email.
Logistics firm Via Mat International, one of the maincompanies that brokers say rents space from Zurcher Freilager AGto store customers' metal, said it operates vaults in bondedwarehouses in the greater Zurich area but declined to givefurther information, citing security and confidentiality.
Zurich has traditionally been the hub of platinum storageand distribution by traders, bankers and producers, althoughSingapore, Hong Kong and London have tax free storage areas too.
INCREASED STORAGE
Swissmetal Inc. (SMI) stores over 400 tonnes of precious andrare strategic metals in Zurich Freilager, with a partner, butsaid it could not disclose how much of it was platinum.
"Over the past few years, the amount of metal stored in theZurich free zone has increased a lot," said General Manager KnutAnderson, who last visited the Freilager vaults five months ago."Demand for storage space (there) now outstrips supply."
Market players in all commodities seek to keep theirholdings under wraps, but most do not have the option, forlargely logistical reasons.
Large amounts of copper for example are stored in bondedwarehouses in China but flows have been tracked since thewarehouses started to be used, in the 2000s.
Bonded stocks estimates for copper are available and vary byonly about 10-20 percent unlike those for platinum, which hasbeen stored in vaults for almost a hundred years.
"Copper warehouses are still generally accessible. You cango and take a look or probably you know somebody who has taken alook," Macquarie head of metals research Colin Hamilton said.
"But platinum has been there for years and the metal isstored in a vault so unless you have access to that vault, whichwould be limited to very few people, then no one is going toknow."
Given the lack of visibility, most platinum analysts ignoreoff-shore stock movements when estimating global inventories,generally including import data, stocks backing platinum futurescontracts and exchange-traded fund (ETF) holdings.
The resulting estimates range from 4 million to 20 millionounces, worth anything between $5.8 billion and $29 billion. (Additional reporting by Joshua Franklin and Paul Arnold inZurich, Ed Cropley in Johannesburg, Noah Barkin in Berlin andPolina Devitt in Moscow; editing by Philippa Fletcher)
