Platinum in Peril?
Ongoing labor unrest and closures in the platinum mining industry—particularly in South Africa, where Anglo American Platinum has shuttered several mines, sparking strikes at others—have caused stock shares to drop and slowed production, leaving many U.S. retail jewelers wondering just how the events might affect them.
Industry insiders familiar with the platinum trade say there is currently an abundance of the metal in the U.S. marketplace, but platinum’s price per ounce—at press time, $1,688—could escalate depending on how the strikes and closures affect mining costs such as fuel.
According to Huw Daniel, president of the U.S. division of Platinum Guild International, the platinum industry has experienced an oversupply during the past year. “This balance is now changing, and prices are up just 7 percent on the average for the last 12 months,” he says. “Lower supplies will put some pressure on prices, but these should not significantly affect retail.”
Torry Strong, president of Richmond, Va.–based Hoover & Strong, concurs about supply, but says that the next six to eight months are anybody’s guess. “It will be interesting to see what happens to price.”
In mid-January, the unrest drove the price of platinum high enough that it surpassed the price of gold for the first time since March 2011. The yellow metal had traded at premium to platinum for most of 2012.
Daniel notes, too, that the mining strikes have yet to become a “consumer issue,” as most media reports are focused on “the bigger social and political issues that are behind disputes that have now spread to other sectors of activity.”
To prepare for the possibility of strike repercussions in the United States, both Daniel and Strong advise jewelers to stock up on product now—particularly on best sellers and platinum semi-mounts with entry price points of up to $2,500 retail—and to keep customer conversations focused on platinum’s intrinsic value, unique properties, and rarity, rather than on spot prices.
Ring in platinum with 6.04 cts. t.w. round blue tourmalines with 0.43 ct. t.w. diamonds; $25,000; Tamir Jewels, Beverly Hills, Calif.; 310-858-6600; tamirjewels.com
They’re the color of the Aegean Sea and about as big as two aspirin, but these round blue tourmalines promise to have a more calming effect than any over-the-counter pharmaceutical. Weighing in at 6.04 cts. t.w., the stones—surrounded by colorless diamond halos—are set in a north-south orientation platinum ring, designed and produced by Tamir Pinchasi of Beverly Hills, Calif.–based Tamir Jewels. Potential buyers will recognize the rarity of this color, as well as the shape; blue tourmalines are more commonly seen in cushion and oval cuts in order to retain maximum weight and color. But the fact that they come in a pair gives them even more cachet. “It’s difficult to showcase identical twins,” says Pinchasi. “The rough that these gems were cut from was very bright and deep in color, so cutting rounds actually added more brilliance and didn’t result in a loss of tone or saturation.”