Untapped opportunity in India for platinum jewellery – Metals Focus

Otmane El Rhazi from The Bullion Desk.

There is a significant opportunity for platinum jewellery to make inroads in India that has yet to be realised, Metals Focus’ Phillip Newman told delegates at the LPPM seminar on Tuesday.

Despite being a culture that typically has its affinity with gold, Newman says that platinum-based jewellery is becoming increasingly popular, particularly among younger people.

The metal is quickly becoming a status symbol and lacks the cultural ties of gold, Newman said. It is typically sold only by high-end retailers and under large brand names.

India’s annual consumption is around 180,000 ounces, Newman estimated. Compared with the annual market of 1.5 million ounces in China – the world’s main consumer – this represents a significant opportunity.

“We have a large unrealised opportunity in India… it is very much in its infancy,” he said.

The fact that the 60 percent of the population is under 30 years old “means there is a considerable opportunity to be tapped”, he added.

Furthermore, platinum jewellery is becoming more popular as a standalone product instead of simply being used to show precious stones.

And what was typically a metal that was more directed towards women is now increasingly targeted at men, he told delegates.

Global platinum jewellery fabrication retreated three percent to reach an estimated 2.57 million ounces or 79.9 tonnes in 2014, Thomson Reuters said in its GFMS Platinum & Palladium Survey. But platinum jewellery demand is likely to return to growth in 2015 albeit at moderate levels as lower spot prices should boost consumption.

The US may also hold opportunities for platinum jewellery, particularly as the economy gets stronger, Newman said.

The prospects also look brighter while platinum trades at a discount to gold, meaning that retailers are increasingly revisiting platinum. Spot platinum was last at $,149.00 per ounce while gold was at $1,207.60, putting the platinum gold:ratio at 1.05.

But platinum’s performance depends on how much prices increase. If the metal react to its fundamentals and the price therefore soars, smaller retailers in particular are likely to fall back on cheaper products again such as 14-carat white gold, he said.

(Editing by Mark Shaw)

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