New research released today (18th November) by Johnson Matthey has indicated that demand for platinum jewellery recovered strongly in the second half of 2008.

The company conducted its Platinum 2008 Interim Review and found that the level of consumer buying was affected in the first half by the rapidly-increasing platinum price.

However, that trend has now been reversed as global drivers pushed the price back down in the third quarter, allowing the industry to rebuild stocks, which should lead to increased consumer spending.

In addition, the company notes that the lower price saw less scrap metal being returned from Asian consumers, a claim underscored by the fact that purchasing volumes on China's Shanghai Gold Exchange climbed in Q3.

Demand for high-end platinum in North America has remained strong, while the first half dip in consumption in Europe has been offset by increased demand for platinum in the Swiss watch industry.

Meanwhile, Johnson Matthey also found that global demand for palladium jewellery may increase to 780,000 oz in 2008 - a rise of 55,000 oz which reverses two years of declines.

China is set to play a prominent role in that figure, with demand in the country soaring by ten per cent to a total of 550,000 oz, while combined demand in Europe and North America should be up by 125,000 oz.

The company attributes the increase in interest to a number of factors, including the dwindling palladium price in Q3, recycling rates declining and improved product availability.

In Europe and North America, palladium is beginning to establish itself as a force in the jewellery industry as it is more affordable than platinum and gold, with men's wedding rings proving especially popular.

Source:

PLATINUM 2008 INTERIM REVIEW (18/11/08)
http://www.platinum.matthey.com/publications/pgmreview.html