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| Platinum jewellery demand on a rise in India |
| Dilip Kumar Jha / Mumbai May 06, 2011, 00:00 IST |
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Platinum is becoming a preferred metal for jewellery consumers in India, due to a relatively moderate rise in prices. The jewellery demand for gold, the perennial choice, rose 69 per cent in the past year; that for its infant competitor, platinum, saw 45-50 per cent growth.
According to Vijay Jain, CEO of Orra brand jewellery by Rosy Blue, platinum jewellery demand rose 50 per cent in the past year. A number of renowned brands from Gitanjali Gems (GGL) have also seen good demand. Mehul Choksi, chairman of GGL, puts the growth estimate at 25 per cent this year.
The white metal recorded a marginal 15 per cent surge to Rs 47,400 per 10g in the past year. Gold, the most preferred precious metal for every occasion in India, recorded a price escalation of 31 per cent, to Rs 22,470 per 10g.
“The rapidly growing Indian economy will create exciting opportunities for 2011, which presents strong opportunities for platinum within the jewellery sector. The expanding economy in India enabled new consumers to afford platinum jewellery, with demand and aspiration further stimulated at the higher end, often through specialist jewellery designers, and the international jewellery brands, which have shown strong global recovery,” James Courage, CEO of Platinum Guild International (PGI) had said recently.
PGI estimated a 16 per cent rise in autocatalyst fabrication but the level achieved remained well down on pre-crisis volumes. This was due to sluggish recovery in Europe’s diesel sales, plus substitution of palladium. The benefits of an improving economic backdrop were also apparent from the chemical industry and glass sector. In contrast, heavy price-led losses in Chinese jewellery demand fed through to a 17 per cent drop for global jewellery demand, said Philip Klapwijk, executive chairman of GFMS, the London-based consultancy firm.
As for supply, jewellery scrap rose by 30 per cent, while autocatalyst scrap grew 15 per cent, partly as a result of collectors no longer withholding supplies for lengthy periods.
Klapwijk forecast the platinum price to touch $1,900 an oz comfortably by the end of this year, on the back of a supportive macroeconomic environment and bullish gold prices.
Notoriously volatile, platinum suffered a severe drop, falling from an all-time high of about $2,300 per ounce in March 2008 to a low of about $760 in October 2008. Since then, prices started steadily recovering on a rebound in jewellery and autocatalyst demand in both developing and developed economies.
“Immediately after the global economic meltdown, a huge quantity of jewellery was melted. Since demand has suddenly emerged, jewellers are rushing to bridge the inventory gap. Therefore, jewellery consumption for both consumers as well as for stockpiling has gone up,” said Choksi.
GGL recorded sales growth of 15 per cent in the US. This means consumers are stepping out to invest in jewellery, which is a good sign for the overall precious metals industry, Choksi added.
Many jewellers also plan to launch platinum coins in India, which would be a first.
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