Platinum jewelry demand continues to fall
November 15, 2006
By Beth Braverman

New York - Demand for platinum dropped in 2006 for the fourth consecutive year, according to Johnson Matthey's interim report, issued on Tuesday.

Rising and volatile platinum jewelry prices will decrease global platinum jewelry demand by more than 10 percent this year to 1.74 million ounces. The price has caused manufacturers and retailers from all regions to cut back platinum inventories, while in China and Japan, recycling of old stock also continues to affect the amount of new metal purchased.

But Johnson Matthey experts say they see no signs of sharp price decreases in the near future.

"Investment funds could support the platinum price at a $1,200 level, but if that interest were to decrease, we still see support from the jewelry sector and other industries supporting prices of more than $980," says Ellen Zadoff, market-research manager for Johnson Matthey.

For the eighth year in a row, demand has exceeded supply, although the deficit this year totaled only 20,000 ounces.

In related news, Johnson Matthey expects palladium demand to fall by 310,000 ounces to 1.12 million ounces for the year, and prices to trade in the $260 to $380 range.