GFMS predicts increase in platinum sales

Platinum jewellery production will undergo a 'strong recovery' this year, according to leading independent precious metals consultancy GFMS.

Platinum jewellery fabrication will undergo a “strong recovery” this year, according to leading independent precious metals consultancy GFMS.

Speaking at the launch of the consultancy’s Platinum & Palladium Survey 2009 report in London, GFMS chairman Philip Klapwijk said the metal, which experienced a 10 percent slump in production in the first half of last year and a marked recoverey in the second half due to a price collapse, was set to benefit from “only modest price gains” this year.

He said GFMS expects platinum prices “to remain sufficiently benign to yield not only a rise in gross jewellery fabrication but also, and perhaps more importantly, a significant decline in supply from the recycling of old jewellery scrap after last year’s spike”.

According to the report, global mine production of platinum fell by seven percent in 2008, mainly due to a power crisis, the flooding of a major mine, skills shortages and safety management issues in South Africa.

“These events were concentrated in the early part of the year, stimulating especially strong investor interest and driving the platinum price to an all-time high of US$2376 in March.

“(It) also triggered exceptionally heavy sales of old platinum jewellery as private individuals cashed in on these elevated prices. Together with further gains in the recycling of scrapped autocatalysts, this injected a considerable volume of platinum back into the market, compensating for the fall in mine production and averting what might otherwise have been a supply crisis.”

GFMS expects platinum trading prices to range from US$900 to US$1375 for the remainder of 2009.

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