Platinum jewellery demand “may soften” in 2011, according to Johnson Matthey, the world’s leading authority on the production, supply and use of platinum.
Released this month, the company’s Platinum 2010 Review reports that higher platinum prices have reduced consumer and wholesale purchasing demand for platinum jewellery this year.
“Gross global demand for platinum in the jewellery sector is forecast to fall by 14 per cent in 2010 to 2.42 million ounces as retailers and consumers reduce purchasing in response to relatively high prices,” the report said.
“Platinum traded higher in the first nine months of 2010 than for the full year of 2009.
“This had the effect of lowering wholesale purchasing of platinum by the jewellery sector, particularly in the price-sensitive Chinese market where full stock levels, thanks to last year’s lower prices, and reduced consumer spending this year are expected to impact demand.
“(In addition) recycling of platinum in the jewellery sector is expected to increase by 30 per cent to 735,000 ounces. As a result, net platinum jewellery demand is expected to fall by 25 per cent to 1.69 million ounces.”
The company concluded that jewellery demand for platinum “may soften” in 2011.
“The first half of 2010 saw a strong recovery in the world economy, driving up industrial demand for platinum. The outlook for the remainder of 2010 and 2011 is less certain, with the possibility that sovereign debt concerns, tighter credit, and national austerity measures may slow economic growth.
“Overall, we anticipate that the platinum market could remain in moderate surplus in 2011 with near-flat production, and rising demand offset by greater levels of recycling.”
Platinum started 2010 trading at US$1500 an ounce and is currently trading at around US$1645 per ounce.