By Geena Paul
MUMBAI: Platinum jewellery is slowly luring the women folk in India. A new trend is now showing that India’s GenNext women are mostly going for platinum jewellery and they find it more attractive now because of the low prices and the rising rates of gold jewellery.
In fact, the young working women in metros like Mumbai and Delhi find platinum as a style statement rather than the old generation’s gold jewelleries.
Again, customers who have always been aspiring to own platinum jewellery but have not been able to do so because of the price, are taking advantage of the low rates now.
Price change means platinum can now be pushed as a fashion accessory rather than a rare — and therefore desirable — metal.
However, platinum’s relative new affordability has not stopped it from being viewed as the ultimate status symbol.
The price of platinum reached a low of $763 an ounce at the end of October last year, although increased demand has been tempered slightly in the last few months by the effect of the credit crunch.
Platinum jewelry demand was forecast to account for roughly 25% of total platinum demand in 2006 (down from 50% in 2000) following the huge rise in prices. High and volatile prices have adversely affected purchases of platinum across the major regions, particularly China during the 2006 period. But things are coming back to normal now.
Platinum is highly valued for its beauty and purity together with its particular properties. Although in Europe and US the normal purity is 95%, in certain countries the purity may be down to 85%. Platinum colour, strength, hardness and resistance to tarnish are some of the advantages of this jewellery.
It provides a secure setting for diamonds and other gemstones, enhancing their brilliance. Moreover, its flexibility is an important element for jewellery designers. Platinum jewelry is regarded as the precious metal for the New Millenium.
Platinum jewellery demand had been increasing steadily for two decades (1980-1999). The world’s leading platinum jewellery market had for long been Japan, where platinum is very popular and fashionable.
However, this market has been affected by the situation of the Japanese economy during the last few years. In the meantime platinum demand has grown sharply in China, which has overtaken Japan as the world’s leading platinum jewellery market. The white metal has become highly appreciated and consumed in China. As a result, platinum-manufacturing capacity has been developed in China. Europe and North America are also quite dynamic markets for platinum, particularly in rings for the bridal sector.
It is not just platinum jewellery that is making the waves. Platinum ETFs are also hot investments these days. ETF Securities has revealed that holdings of its platinum-backed PHPT.L exchange-traded commodity rose by 87 per cent to 321,369 oz in the first quarter of 2009.
Furthermore, the company has noted that the amount of metal it uses to back its palladium-backed product PHPD.L increased by 64 per cent over the course of the same period.
Investors have been piling into precious metals-backed exchange-traded funds since the turn of the year as they seek a safe haven from the volatility being experienced in other asset classes.
Platinum, together with palladium and rhodium, are primary elements in autocalysts that control vehicle exhausts emissions of hydro-carbons, carbon monoxide, oxides of nitrogen and particulate. Autocatalysts convert most of these emissions into less harmful carbon dioxide, nitrogen and water vapor.
Demand for platinum in autocatalysts started to increase significantly in the seventies when clean air legislation was introduced in USA and Japan. Many other countries followed this policy since then. However, in the 1990s, there was a substitution from platinum to palladium in autocatalysts in the United States, mainly due to its relatively lower cost and better performance in autocatalysts.
In Europe platinum was more widely used since it is an essential element for diesel cars. Recent developments in the palladium market together with technological advances have led to a switch back to platinum. In recent years demand for platinum in autocatalysts has shown a considerable growth in emerging countries that introduced new environmental legislation. Demand for platinum in this application is expected to grow as stricter emissions standards and regulations are approved.
Platinum is used in the production of hard disk drive coatings and fiber optic cables. The increasing number of personal computers will have a positive effect on platinum demand in the future.
Platinum is used in fertilizers and explosives as a gauze for the catalytic conversion of ammonia to nitric acid. It is also used in the fabrication of silicones for the aerospace, automotive and construction sector.
Platinum is used in glassmaking equipment. It is used in the manufacturing of fiberglass reinforced plastic and of glass for liquid crystal displays (LCD). In this context, some new developments in the production of LCD glass and cathode ray tubes, both used in computer screens should be mentioned.
