Demand for platinum jewellery increased in China in 2008 and offset global declines, a new report released today (18th May) by Johnson Matthey has suggested.

According to the firm, net demand for platinum in the country increased by 70,000 oz to 850,000 oz during the year, while annual recycling volumes fell from 290,000 oz to 210,000 oz.

In addition, gross demand in China was almost unchanged at 1.06 million ounces as sales increased strongly from September onwards against the backdrop of a falling platinum price.

As a result, global platinum jewellery demand only declined by 6.2 per cent to 1.37 million ounces last year and Johnson Matthey is expecting the country to enjoy a similarly strong 2009.

"Consumer purchasing has been extremely strong in China so far in 2009 and sentiment in the trade is very positive," the company's new 'Platinum 2009' report stated.

"Increased net platinum jewellery demand in China and in Japan should easily outweigh the anticipated weakness in the North American and European jewellery markets."

The report also noted that record platinum prices experienced in the early part of the year had led to a marked fall in purchases and spurred old jewellery recycling in Asia, and China in particular.

However, as the price began to decrease in the midst of the economic crisis, some manufacturers increased their stocks and retailers tempted consumers with better deals.

Moving to Japan, the overall trends were replicated but net jewellery demand slumped considerably from 180,000 oz to 55,000 oz, although gross demand stayed relatively flat.

During the latter part of the year, manufacturers who reduced their prices were rewarded with a major spike in sales volumes, with the kihei chain proving particularly popular.

Johnson Matthey also found that European net jewellery demand jumped by 5,000 oz to 195,000 oz in 2008, with sales falling in the first half and retailers reluctant to restock.

Demand across the continent remained low as recession struck in the second half, although Switzerland usurped the UK as the biggest market through an increase in platinum watch production.

Finally, economic woes in North America meant that net platinum jewellery demand fell by 11.5 per cent to 195,000 oz, although the bridal market continued to enjoy strong sales.

Johnson Matthey press release

Ÿ Adfero Ltd