Platinum demand remains resilient despite price

Global demand for platinum jewelry, such as this piece from Scott Kay, remained strong in 2007 despite the metal's high price, according to Johnson Matthey's 2008 report.

Despite platinum's rising price, which averaged $1,304 per ounce last year—36 percent more than in 2006—retail sales and manufacturing volumes of platinum jewelry in 2007 remained fairly resilient, boosted primarily by the high-end and bridal sectors, according to Johnson Matthey's annual platinum report for 2008.

Global demand for new metal in the jewelry industry actually dipped slightly in 2007, the metals consultancy said, falling 55,000 ounces to a total of 1.59 million ounces, yet demand from both the trade and consumers alike stayed strong for the majority of the year.

Platinum jewelry demand in Europe increased by 7.7 percent to a total of 210,000 ounces in 2007, and net demand for new metal from the Chinese jewelry sector increased by 20,000 ounces to a total of 780,000 ounces.

China remains the largest market for platinum jewelry, according to Johnson Matthey, with Chinese manufacturers buying 2.6 percent more of the metal compared with other markets. In the last year especially, platinum demand in China was particularly supported by the production of novelty platinum items and memorabilia manufactured in preparation for the 2008 Beijing Olympics.

In North America, however, where the economic slowdown has been accompanied not only by higher platinum prices but also by pressure on local manufacturing from imported jewelry, purchases of platinum by jewelry manufacturers declined by 5,000 ounces in 2007 to a total of 240,000 ounces.

Looking forward, Johnson Matthey expects platinum prices to remain volatile, though the high prices haven't yet been felt in the jewelry industry this year. The outlook for jewelry demand in 2008 is more dependent on price than previously, Johnson Matthey said in the report, but the high-end and bridal sectors will remain insulated from price changes.

While perhaps the biggest story regarding platinum for 2007 was supply—which fell by 4 percent in 2007—Johnson Matthey said there is still the possibility that supply for 2008 will increase. Among the biggest issues concerning supply in the last year were strikes and wage negotiations at mines in South Africa, plus a Lonmin smelter shutdown in the country, and general issues concerning improved safety and the acquisition of skilled staff.
Source: nationaljewelernetwork

Report: Platinum jewelry demand dips in '07

One-of-a-kind platinum ring with 134.28-carat blue topaz by Gurhan; suggested retail price is $6,540.

By Mary Wisniewski

New York—Demand for new platinum from jewelry manufacturers will dip slightly in 2007, despite modest growth in platinum jewelry purchases in China and Europe, as will demand for new palladium, according to Johnson Matthey's Platinum 2007 Interim Review, released today.

According to the review, overall global platinum demand is expected to increase by 2.9 percent to a record 6.93 million ounces in 2007, but demand for new platinum by jewelry manufacturers will decrease by 1.5 percent to 1.6 million ounces. Platinum Guild International released a statement explaining that the 1.5 percent figure doesn't account for finished platinum jewelry imported into America from overseas manufacturers, which has trended up over recent years.

The strengthening economy and growing consumer appetite for platinum jewelry in China will increase demand for new metal in the country by 20,000 ounces to 780,000 ounces in 2007; however, Japan's platinum demand for jewelry will fall by 55,000 ounces to 305,000 ounces.

Johnson Matthey also reports that recycling of retail stocks and old jewelry traded in by consumers will be substantial again, satisfying a high proportion of manufacturing requirements in Japan and China.

Platinum supply will also tighten in 2007, dropping 2 percent to 6.66 million ounces. South Africa's supply interruptions are partly to blame, along with a weak U.S. dollar and strong oil and gold prices.

Asia can be expected to support a platinum price of $1,350 per ounce, according to Johnson Matthey, which could rise over the next six months to $1,575 per ounce, depending on platinum's stronger-than-expected fundamentals and support from a buoyant gold price, as well if the U.S. dollar continues to slide.

Johnson Matthey also reports that palladium demand is set to rise in 2007, but the market will remain in surplus.

According to the review, overall global palladium demand is expected to increase by 250,000 ounces to 6.61 million ounces in 2007, but demand for new palladium by jewelry manufacturers will decrease by 250,000 ounces to 745,000 ounces as purchases by Chinese manufacturers have declined, dropping from 760,000 ounces to 500,000 ounces this year.

Furthermore, palladium manufacturing levels have fallen and demand for new metal has once again been offset by the use of recycled jewelry and the purchase of palladium refined from industrial scrap. North American and European demand for new palladium for jewelry manufacturing will slightly rise, however, reflecting the launch of test ranges of palladium jewelry in these regions.
Source: nationaljewelernetwork

Platinum Falls on Concern Rally May Cut Demand

Platinum fell on speculation that the metal's rally this year to a record will curb demand. Palladium also dropped.

Platinum has surged 28 percent in 2007 as a slumping dollar drove demand from traders seeking alternative investments. The price increase may discourage buyers who use the metal to make jewelry and car parts, said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey.

``Physical demand is starting to slow at these price levels,'' Goodis said. ``Nobody is immune to the fundamentals of supply and demand. As the price trends higher, the demand does start to dip.''

Platinum futures for January delivery fell $3.60, or 0.3 percent, to $1,465.50 an ounce on the New York Mercantile Exchange. Earlier, the metal reached a record $1,474.90.

For every $100 increase in the platinum price, jewelry demand has dropped by 200,000 ounces, according to Lonmin Plc, the world's third-largest producer of the metal. Jewelers account for 24 percent of global demand, according to London- based metals trader Johnson Matthey Plc.

The metal also is used to make pollution-control devices in autos.

Palladium futures for December delivery dropped 55 cents, or 0.2 percent, to $375.20 an ounce. The metal has still gained 11 percent this year.
Source: bloomberg

Gold, platinum prices continue surge

Platinum hit a record high of $1,409 per ounce in London today, as gold prices hovered near a 28-year peak, Reuters reported.

Platinum prices soared in part due to issues over supply. Anglo Platinum, the world's biggest platinum producer, was affected by power outages in South Africa, the firm told the news source. Dealers, however, said it might be difficult to sustain the high price, expecting it to pull back to around $1,375 per ounce.

Platinum also got a boost from a surge in gold prices on Thursday due in part to the weakening U.S. dollar and firm oil prices.

Gold's spot price in London stood at $747.10-$747.90 per troy ounce compared with $750.40-$751.20 in New York on Thursday, when it rose as high as $753.60, its highest since January 1980, according to Reuters.

Investment bank Morgan Stanley stated its 2008 gold-price forecast at $800 per ounce, anticipating that strong global growth and spreading inflation problems would benefit the metal.

The bank told Reuters that growth in gold demand, particularly from an expanding middle class in the developing world, would continue to drive gold prices, despite inflation and dollar concerns temporarily taking the spotlight.

Meanwhile, Morgan Stanley said it was leaving its previous forecast for 2007 gold prices intact at $680 per ounce, but lowered its silver price to $13.30 per ounce from $13.80 per ounce, and placed the 2008 forecast at $15 per ounce.

"Silver prices have been weighed down by economic uncertainty...specifically, silver's exposure to industrial demand has made prices vulnerable to general economic growth concerns stemming largely from fears concerning a U.S. growth slowdown," the bank said.
Source: nationaljewelernetwork

Beware: Platinum Quality Can Vary in Jewelry

Platinum has become a popular choice for jewelry due to its strength, durability, and marketing efforts of the platinum industry in recent years. Platinum is three times more expensive than gold. Jewelers aggressively market it because they make three times the profit on every platinum item they sell compared to gold. Platinum is a naturally white, lustrous metal that is long lasting. Sometimes the claims of strength and scratch resistance are overstated. Like all precious metals, platinum will scratch. A platinum scratch is different from white gold because it simply “plows” the metal instead of removing it.

Traditionally, jewelry manufacturers used platinum alloyed with metals from the platinum group metals (iridium, osmium, palladium, platinum, rhodium, and ruthenium). With the proper mix of these platinum group alloys, platinum becomes one of the hardest metals making it a strong and durable jewelry metal. Platinum will not rust or corrode and the platinum family metals make it hypoallergenic and ideal for persons with sensitive skin.

Federal Trade Commission (FTC) guidelines for platinum jewelry state that only items consisting of 950 part per thousand of pure platinum can be marked stamped “PLATINUM” or “PLAT” without more alloy information. From 750-950 Platinum, the platinum group metals must also be indicated. For example, PLAT900IRID for 10% Iridium alloy. Historically, the most common alloys in America were 95% Platinum with 5% Ruthenium or 5% Cobalt and 90% Platinum with 10% Iridium.

There is a misperception that the 950 platinum is better than the 900 platinum. However, pure platinum is very soft and the right alloy mix is what is important. Different alloys and different percentages produce better results for different jewelry purposes. Some alloy mixes work better for casting and some are better for handcrafting like bending the prongs over fragile diamond corners. Many artisans feel that PLAT900IRID is the best general-purpose alloy for diamond rings.

While platinum is best known for its use in jewelry, more than 60% of platinum is used for other industrial purposes such as catalytic converters in autos and pacemakers in the medical field. Because of its rarity and the rapidly increasing demand for this versatile metal, the price has soared in recent years.

The high price of platinum has caused some jewelry manufacturers to start using lower percentages of platinum and to use other alloy metals to lower the cost of the jewelry. Unfortunately, these new alloy mixes are reducing the very qualities that made platinum desirable. The new alloys produce more brittle platinum that is more susceptible to damage.

For example, metal that is stamped 585 Platinum is really only 58.5% pure platinum and 41.5% copper and cobalt with the result that it is more likely to crack, crater, discolor or irritate sensitive skin. Less scrupulous jewelry vendors remove the 585 stamp and complicate the situation, leading consumers to believe the metal is the traditional high quality platinum.

Historically the jewelry shopper did not have to be concerned about the purity of platinum because the alloy metals were in the platinum group the quality was uniform regardless of the particular alloy or percentage used.

Today’s jewelry shopper is at potential risk because the lower quality platinum looks the same as the higher quality platinum. While platinum looks similar regardless of the alloy, the weight of lower quality alloy mixes is lower because there is so much less of the dense platinum.

Currently there are no FTC guidelines for the new platinum alloys so it is up to the jeweler or appraiser to help the consumer determine if the platinum is well suited for its intended use. The consumer deserves a warning if sold lower quality platinum since it might not hold stones as well and is more susceptible to damage. However, do not expect the jeweler selling low quality platinum to point out this potential problem. As with any important purchases, it is up to the consumer to be knowledgeable and ask the right questions before making a purchase.
Source: pr-gb