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Jewelry demand for platinum to rise in '09

November 18, 2009
North American platinum demand for jewelry, such as this Snowflake Brooch by Maevona, is expected to fall by more than a quarter this year to 140,000 ounces.

New York--Global net jewelry demand for platinum is expected to climb by almost 80 percent this year to 2.45 million ounces, with increased interest primarily from Japan and China, according to Johnson Matthey's new "Platinum 2009 Interim Review."

In Japan, where lower platinum prices have reduced recycling flows, net demand for platinum jewelry is expected to climb by 255,000 ounces to 310,000 ounces in 2009.

The Chinese market, however, will serve as the primary driver for platinum jewelry demand. Demand in the nation is expected to leap to a record level of 1.75 million ounces in 2009, due to strong consumer purchasing and hefty restocking, with net platinum demand in the first half of 2009 rising to more than one million ounces in China alone.

Net demand is expected to fall in Europe and North America, with tough economic conditions the leading culprit behind the declines.

Purchases of platinum by the European jewelry and watch industries are forecasted to decrease by 15,000 ounces to an estimated 185,000 ounces this year. The report indicates that while platinum use in the Swiss watch industry will drop due to lower watch production and careful stock control by manufacturers and retailers, demand for platinum in the U.K. market will likely be steady year over year, due to a robust bridal market.

Platinum demand in North America, meanwhile, where consumers' disposable income has been hard hit and retailers have reduced stock, is expected to fall by more than a quarter this year to 140,000 ounces.

Looking forward, Johnson Matthey says that platinum demand from the jewelry industry is likely to soften somewhat during the next year. The strong levels of platinum demand in China since the last quarter of 2008 were partly due to a high degree of stock building, which the metals consultancy says is unlikely to be repeated in 2010.

With the price of platinum lower than its 2008 peak levels, an upturn in the world economy next year would likely lead to a slight increase in demand in other markets.

As with platinum, palladium in 2009 is likewise set for an increase in net jewelry sector demand, which is expected to climb to a global total of 920,000 ounces. The report says the economic slowdown has helped palladium gain a share of the market for men's wedding bands in North America, while the approval of a palladium hallmark in the United Kingdom should boost demand in Europe.
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