Platinum jewelry demand dips in '07
November 13, 2007
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| One-of-a-kind platinum ring with 134.28-carat blue topaz by Gurhan; suggested retail price is $6,540. |
By Mary Wisniewski
New York—Demand for new platinum from jewelry manufacturers will dip slightly in 2007, despite modest growth in platinum jewelry purchases in
China and Europe, as will demand for new palladium, according to
Johnson Matthey's Platinum 2007 Interim Review, released today.
According to the review, overall global platinum demand is expected to increase by 2.9 percent to a record 6.93 million ounces in 2007, but demand for new platinum by jewelry manufacturers will decrease by 1.5 percent to 1.6 million ounces. Platinum Guild International released a statement explaining that the 1.5 percent figure doesn't account for finished platinum jewelry imported into
America from overseas manufacturers, which has trended up over recent years.
The strengthening economy and growing consumer appetite for platinum jewelry in China will increase demand for new metal in the country by 20,000 ounces to 780,000 ounces in 2007; however, Japan's platinum demand for jewelry will fall by 55,000 ounces to 305,000 ounces.
Johnson Matthey also reports that recycling of retail stocks and old jewelry traded in by consumers will be substantial again, satisfying a high proportion of manufacturing requirements in Japan and China.
Platinum supply will also tighten in 2007, dropping 2 percent to 6.66 million ounces. South Africa's supply interruptions are partly to blame, along with a weak U.S. dollar and strong oil and gold prices.
Asia can be expected to support a platinum price of $1,350 per ounce, according to Johnson Matthey, which could rise over the next six months to $1,575 per ounce, depending on platinum's stronger-than-expected fundamentals and support from a buoyant gold price, as well if the U.S. dollar continues to slide.
Johnson Matthey also reports that palladium demand is set to rise in 2007, but the market will remain in surplus.
According to the review, overall global palladium demand is expected to increase by 250,000 ounces to 6.61 million ounces in 2007, but demand for new palladium by jewelry manufacturers will decrease by 250,000 ounces to 745,000 ounces as purchases by Chinese manufacturers have declined, dropping from 760,000 ounces to 500,000 ounces this year.
Furthermore, palladium manufacturing levels have fallen and demand for new metal has once again been offset by the use of recycled jewelry and the purchase of palladium refined from industrial scrap. North American and European demand for new palladium for jewelry manufacturing will slightly rise, however, reflecting the launch of test ranges of palladium jewelry in these regions.
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