The rising price of platinum saw jewellery demand slow in China last year, according to the latest update from Johnson Matthey (JM) on the current global pgm market.

JM maintained the view, published in its November 2004 report, that demand in China fell last year by around 20 per cent to 960,000 oz. However there was some encouragement derived from Chinese consumers' growing preference for platinum rings with diamonds, particularly in the bridal market.

By contrast sales of palladium jewellery in China have risen, with JM revising its current estimate - of major growth in 2004 from 25,000 oz to 510,000 oz - upwards.

Palladium imports to Hong Kong averaged over 51,000 oz per month between May and December, drawn in by the growth in consumer spending power in the region.

Elsewhere demand for platinum is continuing to be fortified by the European light-duty diesel sector, which accounted for around 1.25 million oz of platinum in 2004.

An increase in catalysed diesel particulate filters also helped bolster pgm sales, with JM reporting that the growing stringency of emissions legislation would have "a positive influence on demand going forward".

Meanwhile, glass industry demand for platinum also continues to grow, outstripping JM's forecast of 240,000 oz in 2004.

Reports of "tremendous growth" in global sales of Liquid Crystal Display (LCD) screens - from laptop computers, flat screen televisions, mobile phones cameras, digital music players and DVD players - helped to explain Japan's sudden jump in platinum demand, up by more than a quarter in a year.

In the short-term JM expects platinum supply to continue to grow, with South African supply approaching the 5 million oz mark for 2004.

However, with the strength of the rand remaining the potential weakness for the industry, JM commented that the "long-term viability of many of the planned new pgm mines in South Africa remains uncertain".