BEIJING (Commodity Online): Platinum is set to ride the Chinese wave in the coming months as the Dragon land will remain the world’s largest consumer of Platinum jewellery for a long time.

This was revealed by precious metal fabricator Johnson Matthey Plc, which said China is a very young market and therefore still has a lot of room to grow.

Chinese platinum jewellery demand will be around three-quarters of a million ounces and that will be the starting point it will grow from, Johnson Matthey said.

China is the new Japan in terms of platinum jewellery consumption. Japan has traditionally been the major consumer of platinum jewellery; it was the number one buyer of platinum for jewellery during the economic boom years.

Global market prices for platinum have increased from around $900 per ounce at the beginning of 2009 to the current price of approximately $1,400 per ounce, largely driven by Chinese demand.

Chinese platinum demand will reach 2.04 million ounces in 2009 up 66.12% YoY accounting for 34.38% of global demand this year. The majority of China’s platinum demand is attributed to the jewellery making industry, which grew by an incredible 105.88% in 2009 YoY. Chinese jewellery makers and retailers built up large Platinum stocks when platinum prices were low earlier in the year.

Currently jewellers and retailers have nearly full platinum stocks and will most likely not replenish them as actively next year as they did at the beginning of 2009. However, underlying demand will still exist.

According to Chinese culture, 2009 is thought of as an auspicious year for marriages and other ceremonious events, which contributed to increased platinum jewellery consumption.

According to Chinese tradition, 2010 is not considered a lucky year which may have a slightly negative impact on platinum jewellery consumption. In terms of industrial demand, the majority comes from the automotive and chemical industries and robust growth in both sectors in 2009 has boosted overall Chinese demand for platinum.

Johnson Matthey has two plants in Shanghai that produce catalysts used in both industries. Platinum is used in catalytic converters mainly for the control of exhaust emissions. It is also used in the manufacture of intermediary chemicals used for production of plastics.

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