Global Platinum Jewelry Demand Up, Palladium Down in 2011

Platinum jewelry demand increased by 2 percent in 2011 to 2.48 million ounces, while palladium purchasing fell 15 percent to 505,000 ounces, according to Johnson Matthey’s Platinum 2012 Review.

The platinum demand increase came mainly from China—where demand reached 1.68 million ounces—as well as India, where demand rapidly grew. Lack of positioning in the Chinese market affected the decrease in palladium purchases.

Platinum jewelry demand in North America increased by 6 percent to 185,000 ounces, according to the study. High-end manufacturers continued to be extremely busy meeting export as well as domestic demand for platinum jewelry pieces. The expansion of brand-name jewelry retail outlets overseas, particularly in fast-growing emerging markets, was positive for demand in North America. In terms of domestic demand, successful marketing of platinum engagement and wedding rings to young couples helped sales of bridal jewelry against an overall backdrop of falling marriage rates.

Global supplies of platinum grew by 7 percent last year to 6.48 million ounces. Underlying mine production in South Africa fell by around 120,000 ounces. According to the study, releases of metal from inventories meant that total shipments from South Africa rose by 5 percent to 4.86 million ounces. A ramping-up of mined output in North America following shutdowns in 2010 and new and expanding operations in Zimbabwe coming on-stream together contributed significant additional ounces.

According to the study, gross demand for palladium in the jewelry sector in North America fell by 31 percent to 45,000 ounces. High unemployment and subdued economic growth meant that 2011 was a difficult time for much of the jewelry market. Sales of palladium jewelry were on the decline because of elevated prices; additionally, palladium was challenged in its stronghold—the men’s jewelry market—by cheaper, non-precious alternatives.

Consumer demand for palladium is expected to fall throughout 2012, while platinum demand is expected to increase with retail expansion in China. 

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