China's demand for new platinum jewelry is estimated to grow 2.6
percent this year despite the highflying prices of the precious
metal on the country's strong economy, leading supplier Johnson
Matthey said yesterday.
China's jewelry demand for new platinum is expected to grow
20,000 ounces to 780,000 ounces this year, the London-based company
said in its Platinum 2007 Interim Review.
Consumers in first-tier cities such as Shanghai and Beijing
widely eye the white metal as extremely valuable. The marketing
campaign of Platinum Guild International on platinum wedding pieces
and the metal's modern image boost its appeal among Chinese
consumers.
The nation's economy is in its fifth straight year of
double-digit growth, reaching 11.5 percent in the third quarter
this year. The strong economy is expected to boost Chinese
purchasing power on non-necessities such as jewelry.
A 2006 PGI survey found about 51 percent of respondents - women
aged 18 to 54 - said platinum jewelry was their favorite.
Eighty-four percent of 700 newly married women said platinum
jewelry was their first choice for wedding jewelry.
Physical purchasing from Asia can be expected to support a
platinum price of US$1,350. Platinum's stronger than expected
fundamentals and support from a buoyant gold price could see
platinum trading as high as US$1,575 during the next six months,
particularly if the US dollar continues to slide.
Meanwhile, the demand for new palladium for jewelry is set to
drop by more than a quarter this year as purchases by manufacturers
in China have declined.
In China, the palladium demand in 2007 will drop from 760,000
ounces to 500,000 ounces. Manufacturing levels have fallen and
demand for new metal has again been offset by the use of recycled
jewelry and the purchase of palladium refined from industrial
scrap.
Palladium jewelry is a relatively new development with most
high-volume manufacturing and retail activity taking place in
China, although fledgling markets are developing elsewhere.
(Shanghai Daily November 14, 2007)
