November 13, 2012 – Chinese platinum jewellery demand was forecast to jump in 2012 as Hong Kong retailers added outlets, while palladium jewellery demand was seen sharply down, in part due to a lack of effective marketing, a report by refiner Johnson Matthey said.
Chinese platinum jewellery demand was seen up 14 percent to 1.92 million ounces this year as Hong Kong brands expanded in cities to meet a growing appetite for luxury, the report said.
However, Chinese palladium jewellery demand was forecast to sink by more than a fifth to 240,000 ounces this year, due to competition from white gold alloys and the lack of a cohesive marketing initiative for he white metal.
Total Chinese demand for platinum jewellery was forecast to have risen to the highest level since 2009.
In the first eight months of 2012, new purchases of platinum by the Chinese jewellery industry reached a three-year high, taking advantage of Renminbi (RMB) prices that were on average 16 percent lower than the same period in 2011.
“Manufacturers increased working stocks of metal to meet burgeoning demand and purchasing by the trade was also driven higher by the need to manufacture stocks of platinum jewellery for the large number of new retail outlets which are being opened by Hong Kong jewellery brands,” the report said.
“These fully stocked branches are typically located in new shopping malls and department stores, often in fast-growing second and third-tier cities.”
Chinese palladium jewellery demand was projected to fall 21 percent this year, with most of the purchasing that remains being for the manufacture of plain jewellery, the report said.
“The number of palladium jewellery manufacturers in China continues to decline, with even those remaining in the business reducing their output in response to weak retail pull,” it said.
The RMB price was on average 18 percent lower in the first three quarters of 2012 compared with the same period last year.
“With concerns that palladium jewellery pieces may not hold their value when traded in, consumers have been reluctant to purchase the metal,” Johnson Matthey said.
“In addition, a continued lack of effective marketing means that awareness of palladium remains fairly limited overall.”
