Demand for platinum jewelry in the U.S. and most European markets is “broadly stable,” according to Johnson Matthey’s first update on the platinum market for 2004.

However, the report, released Monday, adds that Chinese platinum jewelry demand may “fall for the second year in succession for 2004.” In addition, it says that although economic recovery appears to have begun in Japan, it hasn’t resulted in increased jewelry sales.

In the United Kingdom the news is much better, according to the report, with platinum jewelry sales for the first half of 2004, 21% higher than the same period in 2003.

The report cites the high cost of platinum, pressure on profit margins, and manufacturers diversifying into the production of white gold and palladium as the reasons for the lower demand in China. The report did note that platinum diamond jewelry is gaining an increasing share of the bridal jewelry business in China.

Overall, Johnson Matthey in the report estimates that Chinese demand for platinum jewelry for the first half of the year fell 15% to 20% compared to the same period in 2003.

JCK