Demand for Platinum Jewelry Increases by 33 percent in India; Palladium Demand Drops

Demand was especially strong in China, where buying by manufacturers raised gross jewelry demand 2 percent to 52.3 tons.

In India, a market that has traditionally prized gold above all other metals, an increase in retail outlets offering platinum and rising consumer purchases drove platinum jewelry demand up by a third to 2.5 tons.

Jewelry manufacturers bought 77.1 tons of platinum last year.

Higher average metal prices meant that recycling in the jewelry sector rose by 10 percent to 25.2 tons.

According to the report, the platinum market is forecast to remain in surplus in 2012, which is likely to keep the price in a range of $1,450 to $1,750 per ounce in the next six months, averaging $1,600.

The palladium market fared less well. Purchasing of palladium by the global jewelry industry declined once again. The metal continued to suffer from a lack of positioning in the key Chinese market. In Europe and North America, demand responded to price increases; palladium traded on average 39 percent higher than in 2010, leading manufacturers to offer lower weight and lower fineness alloys to meet retail price points.

A consequence of the lower demand meant that palladium jewelry recycling more than doubled as a result of returns from unsold retailer stock and old consumer jewelry.