Rising Chinese purchases of platinum jewelry will boost global demand for the metal to a two-year high in 2011, according to a British report issued Tuesday.
Johnson Matthey Plc, which refines, markets, distributes and recycles platinum group metals, forecast gross global platinum demand for jewelry climbing by two percent this year, or 2.47 million ounces, because of demand in China, the world's largest market for platinum jewelry.
Demand will be softer in Europe, while in Japan and North America, demand is expected to be robust. Elevated gold prices, and the parity with platinum, may help platinum gain market share in the bridal sector, although both metals face competition from alternatives, Johnson Matthew said in its Platinum 2011 Interim Review.
Despite higher prices, purchasing of platinum by the jewelry industry in China is set to rise by 35,000 ounces to 1.69 million ounces this year, suggesting that manufacturers, retailers and ultimately consumers are adjusting to higher price levels, said Johnson Matthew.
The recent price parity of gold and platinum has given something of a boost to platinum, which is seen as a good buy in comparison with gold by manufacturers, retailers, and some consumers.
Gross platinum jewelry demand in Japan and North America will be steady this year at 320,000 ounces and 175,000 ounces, respectively.
In Europe, gross platinum jewelry demand will fall this year by 10,000 ounces to 165,000 ounces.
The price of platinum on the Comex Tuesday was at nearly the same point it was at the beginning of the year. In late morning trading it was trading around $1,640 per troy ounce.