GROSS DEMAND FOR JEWELLERY FORECAST TO REDUCE BY 14 PER CENT
Gross global demand for platinum in the jewellery sector is forecast to fall by 14 per cent in 2010 to 2.42 million ounces as retailers and consumers reduce purchasing in response to relatively high prices according to Johnson Matthey in "PLATINUM 2010 INTERIM REVIEW", released today. Recycling of platinum in the jewellery sector is expected to increase by 30 per cent to 735,000 ounces. As a result, net platinum jewellery demand is expected to fall by 25 per cent to 1.69 million ounces.

HIGHER PRICES IMPACT WHOLESALE JEWELLERY DEMAND
Relatively high platinum prices are forecast to reduce gross global platinum demand for jewellery fabrication by 390,000 ounces in 2010. Platinum traded higher in the first nine months of 2010 than for the full year of 2009. This had the effect of lowering wholesale purchasing of platinum by the jewellery sector, particularly in the price-sensitive Chinese market where full stock levels, thanks to last year’s lower prices, and reduced consumer spending this year are expected to impact demand.

CHINESE JEWELLERY DEMAND FORECAST TO FALL TO 1.65 MILLION OUNCES IN 2010
Following a strong year for platinum jewellery in China in 2009, gross demand in 2010 is forecast to fall by 430,000 ounces to 1.65 million ounces. Higher platinum prices have reduced purchasing by wholesalers and retailers, heavy buying only emerging when platinum’s price has dipped below $1,500. Evidence suggests that full stock levels, as a result of stock building in 2009, have also reduced gross new demand in China. The elevated price levels have encouraged greater scrapping of old platinum jewellery, raising recycling levels by 36 per cent and contributing to a reduced net demand figure of 1.2 million ounces.

PLATINUM JEWELLERY DEMAND IN NORTH AMERICA FORECAST TO INCREASE
Gross platinum jewellery demand in North America is forecast to grow in 2010 in line with an improved economic situation and increased consumer confidence. Discretionary spending on platinum jewellery in North America and healthier exports to Asia are set to lift jewellery demand by 45,000 ounces to 180,000 ounces. Higher platinum prices appear to have been partly offset by improved economic conditions in North America in the first half of 2010. Medium to high end retailers report increased sales of platinum jewellery, while the bridal sector is also set to increase.

EUROPE AND JAPAN SET TO REMAIN STEADY
Platinum jewellery demand in Europe and Japan is expected to remain largely steady in 2010. Reduced consumer spending has affected jewellery purchases in Europe: however, demand is forecast to soften by a relatively modest 10,000 ounces. The bridal jewellery sector in the UK is expected to remain resilient. We have substantially revised our 2009 figure for platinum jewellery in Japan downwards to 335,000 ounces, due to a reassessment of the impact of the recession on demand for fashion jewellery. Gross demand from the Japanese jewellery market is forecast to soften by a further 5,000 ounces in 2010 as recession and high platinum prices continue to affect the industry. Purchases of Kihei chain, bought by some consumers as an investment, are expected to hold up well in 2010.

RECYCLING OF OLD JEWELLERY SET TO RISE BY 30 PER CENT
Worldwide recovery of platinum from recycling of jewellery is forecast to increase by 170,000 ounces to 735,000 ounces. This includes old jewellery that consumers have traded in as well as unsold retail and wholesale stock. Recycling in the Chinese and Japanese jewellery sector is expected to be particularly strong as consumers return old platinum pieces for recycling through well-established networks.  

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