China’s Platinum Jewellery Market to End 2009 on a High Note

 

According to Johnson Matthey, the precious metals refiner, demand in platinum jewellery market of China will double to record high in 2009, reaching 1.75 Million Ounces, up 900,000 Ounces, as per the news published by Financial Times.

 

This rise is completely opposite to the European and North American platinum jewellery markets where, due to economic recession, demand has dipped down heavily.

 

White metal jewellery in China has been gaining immense popularity, which has increased the demand for platinum jewellery. Among the age group of 20-35, white metal or platinum jewellery has become very popular.

 

The year 2009 is considered as an auspicious year according to Chinese culture for marriages and ceremonious events. Couples looking forward to purchase jewellery for wedding are highly attracted towards platinum. This has led to the increased consumption of platinum jewellery.

 

Also, compared to H1 2008, platinum’s lower price has had a highly positive impact on net demand of Chinese jewellery. Due to the lower prices, jewellery wholesalers and retailers expanded and refilled stocks, thereby increasing platinum’s counter space share where it substituted white gold jewellery.

 

Striking profit margins also encouraged new manufacturers and retailers to enter this sector. This extensive restocking led to a wobbling boost in demand, especially in H1 2009. Further, the weight of platinum sold to customers considerably increased on the back of a plunge in the retail price of platinum jewellery and continuous economic growth.

 

Even though the price of platinum has mounted since the beginning of 2009, the retail prices have remained somewhat below late 2008 levels, signifying that consumer purchasing will stay near its present elevated level.

 

According to a Research Analyst at RNCOS, “As a result of decreasing jewellery demand, China's precious metal consumption is anticipated to fall in coming months. At present, there are almost full stocks of platinum with jewelers and retailers. It is expected that platinum stocks will not be replenished by them next year as it was done during the initial period of 2009, which will certainly affect the market. Also, 2010 is not considered an auspicious year according to the Chinese tradition; this might have some negative impact on the consumption of platinum jewellery.”