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Chinese wedding fever heats platinum market
Reuters | Tue, 19 May 2009 19:37
[miningmx.com] -- An auspicious year for weddings in China is expected to add fuel to an already robust market for platinum jewellery, helping to offset dire industrial demand, a leading industry official said on Tuesday.
James Courage, chief executive of industry-funded Platinum Guild International, said sophisticated retail consumers are increasingly flocking to the metal, reflecting sensitivity to spot platinum prices and the lower premium it commands over gold after a drop in prices last year.
Spot platinum currently stands at $1,143 per ounce having dived sharply from record highs above $2,200 seen last March.
This price fall has also fed the metal's growing investment popularity through the takeup of exchange-traded products.
"What we have seen in China is less effect from the recession. The market at the moment looks robust, if we see a period of steady prices, the opportunity is significant both on the jewellery and bridal side," he told Reuters in an interview during London's Platinum Week.
"A nice boost for 2009 is that it's an auspicious year to get married in China and most of the wedding venues are booked up," he said.
According to the China Daily newspaper, two astrological factors make 2009 auspicious for weddings. The number nine has a connotation with longevity and, by the lunar calendar, this year has two "spring begins" - dates on which farmers traditionally begin planting. SOBER READING
Figures released on Monday by refiner Johnson Matthey for its annual report made sober reading. Net global demand for platinum fell to 6.345 million ounces in 2008 from 6.680 million a year earlier.
Gross autocatalyst demand -- platinum's main end-use -- was depressed by the economic slowdown's impact on the car sector, putting major manufacturers in crisis.
JM said overall platinum demand for jewellery fell 6.2 percent, accounting for 21.5 percent of consumption, but Chinese jewellery demand rose 8.9 percent to 850,000 ounces from 780,000 ounces.
While demand in another major jewellery consumer Japan has been less resilient than China, Courage said the amount of new metal used in the Japanese market, as opposed to recycled material, was set to increase rapidly.
"That, in combination with the growth we've seen in China, will make up quite a lot of the difference with what has been lost in the industrial/auto sector," he added.
Asked about speculation over Chinese stockpiling of metal as opposed to outright usage, Courage said China's jewellery business was enjoying a boom in major cities and increasing penetration in secondary ones.
"Consumer uptake is being reflected in increased manufacturing and the jewellery sector is a strategic sector. We see no evidence of anything other than a very healthy jewellery industry."
