Commodity Online
NEW DELHI: Even though Platinum witnessed a demand fall in 2008, Palladium jewellery fabrication is set to see major strides in the coming days as was evident in the trend in 2008.

According to a report by Platinum 2008 Interim Review written by David Jollie and published by Johnson Matthey, palladium demand is expected to rise to 780000 oz in 2008, reversing two years of decline.

Global demand for palladium from the jewellery sector is expected to reflect an increase of 55000 oz to 780000 oz. Demand in China is set to rise to 550000 oz.

Most of the unsold original stock of 95% purity has now been reprocessed and recycling rates are declining. While the first half of the year saw weak purchasing of palladium by jewellery manufacturers, the fall in the metal price in the third quarter of 2008 rekindled this market.

Interest in palladium jewellery has continued to grow in Europe and North America where pro-duct availability has improved, driving combined demand to 125 000 oz.

Yearly Chinese jewellery demand is expected to reflect an increase of 10%, to a total of 550 000 oz, in 2008.

Palladium demand from jewellery manufacturers was relatively weak in the first half of 2008. The palladium price reached a six-year high and encouraged the industry to reduce working stocks of metal.

The devastating earthquake in Szechuan, China, affected sentiment throughout the country and temporarily dampened jewellery purchasing by consumers. However, a decrease in the palladium price in the third quarter has since driven extra manufacturing and retail interest in this metal. Most of the original Palladium 950 alloy jewellery in China has now been sold to consumers or returned for conversion to higher-purity pieces.

Fresh metal is making up an increasing percentage of the metal used by manufacturers and demand now more closely reflects manufacturing volumes than in recent years.

Palladium jewellery demand in Europe is set to reflect an increase of 5 000 oz, to 50 000 oz, in 2008. North American jewellery manufacturers will also buy more metal this year, some 75 000 oz, compared with 55 000 oz in 2007. In both regions, palladium is steadily establishing itself as a jewellery metal.

The sustained high price differential between palladium and Platinum and Gold has encouraged manufacturers to work with this material and has allowed palladium to establish a niche in men’s wedding bands.

New casting alloys have made manufacturing processes simpler and have also improved product quality. Product availability and consumer acceptance are, therefore, growing in both regions.

Palladium jewellery demand in Japan is expected reflect a drop of 20 000 oz, to 80 000oz, in 2008. Palladium is used as a component of platinum and white gold jewellery alloys in Japan. Retail sales of all jewellery are falling, dragging palladium demand lower. Large amounts of platinum jewellery were also recycled in the first half of 2008 in Japan and the 10% to 15% palladium content of a typical piece was recovered, trimming demand further.

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