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India is emerging as an important market for platinum, with the use spreading in both jewellery and industrial use.
In an email interview with this newspaper, Trevor Raymond, director of research at the World Platinum Investment Council (WPIC), said, “India is becoming an increasingly important market for platinum jewellery, one of the two largest sections of platinum demand, comprising 38 per cent of total demand in 2014. Platinum jewellery demand in India rose by an estimated 35 koz (a koz is 1,000 ounces) to 175 koz (5.45 tonnes) during 2014 and we expect this growth trend to continue into 2015.”
Jewellery demand for platinum is largely for designing, Of late, though, platinum jewellery is becoming trendy. India’s platinum jewellery demand for 2015 is expected to go up 15 per cent to 200 koz. The platinum demand is said to be 12-15 tonnes.Platinum Guild India said, quoting DGCIS (Director General Commercial Intelligence and Statistics) data, that platinum imported in various forms towards jewellery in 2014 was 5.7 tonnes.
This does not include industrial usage/applications.The used metal is recycled, especially that used in the automobile sector.
While the demand for platinum in India’s automotive sector remained flat in 2014 at 160 koz, “we expect it to regain momentum in 2015 as India’s economy continues to grow,” said Raymond. The Bharat Stage-IV emission norms will require more platinum.
WPIC says the two largest segments of platinum demand in India are jewellery (175 koz in 2014) and automotive use (160 koz in 2014). Raymond said they believe India is a solid growth market,thanks to favourable economic conditions and signs of increasing interest in its use for jewellery.
Platinum is at present trading below the price of gold. In the international market, gold is traded at $1,162 and platinum at $1,126 an ounce. However, price outlook for platinum is bullish. “We are forecasting a modest uptick in the price for 2015 to the $1,300-1,350 range. Following the severe decline in mine production last year due to industrial action, we are expecting output to recover this year, with the additional supply in the market limiting the draw-down on global stocks which was a feature of the market last year. Industrial demand is recovering,” said Cameron Alexander at GFMS, Thomson Reuters.
According to Raymond, “Globally up to $10 billion in assets is already invested in platinum. Studies suggest platinum is both an effective diversifier of risk alongside other investments and a long-term store of value.”
WPIC believes total supply of the commodity for 2015 will be 20 per cent higher to 7,965 koz but demand will be three per cent higher at 8200 koz. The deficit will be about 60 per cent lower than in 2014, when there was a five-month strike in major mines.
