Johnson Matthey Plc, a leading refiner of platinum group metals, reports that demand for platinum jewelry among Chinese consumers remains weak. This is despite a recent increase in imports by manufacturers, which has put pressure on global supplies of the metal.
As the world’s second-largest refiner of platinum, Johnson Matthey noted that strong physical demand from China has tightened the market further. This demand has pushed platinum prices to their highest levels in two years. The jewelry industry is aggressively stockpiling platinum because it is a cheaper alternative to gold.
However, the company remains cautious about actual consumer demand. Johnson Matthey expects end-user demand to grow by only about 1% this year, according to Rupen Raithatha, the company’s director of market research.
Raithatha explained, “Just because retailers and wholesalers are stocking up on platinum doesn’t mean consumers are buying it.” He added that their forecast for 2025 demand is conservative. The extra inventory could slow down future manufacturing.
Last week, analysts from Citigroup Inc. said Chinese buyers still prefer gold over platinum jewelry. They also said they will keep watching the market for any major changes in consumer behavior.
The weak consumption of platinum jewelry might help ease the pressure on a market already strained by other factors. Concerns about possible US tariffs recently led traders to rush metal into New York warehouses. This created unusual price differences. At the same time, lease rates in London reached near historic highs, highlighting the tight supply as metal moved to China.
Marcus Garvey, head of commodity strategy at Macquarie Group Ltd., said that falling demand from the automotive sector—the largest user of platinum—means there is unlikely to be a strong long-term rise in platinum prices.
Still, Garvey said prices could stay high next year due to a forecasted multi-year supply shortage. “There is still above ground inventory, but China has effectively taken it out of the Western market,” he noted.
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