Platinum demand to grow 10%

Demand for platinum jewellery in India is seen growing at 8-10 per cent per annum because of its immense popularity among the young generation, which likes to adorn fancy ornaments made from platinum rather than gold, industry officials said today.

Demand for platinum is also up because the precious metal is in short supply amid significant demand growth on the back of the rise in disposable incomes, they said.

"Platinum jewellery is one of the fastest growing segment in the jewellery sector and has been gaining popularity among the Indian masses for quite some time now," said V. Govindraj, retail and marketing head of Tanishq""the jewellery arm of Titan Industries Ltd. Platinum is also used for crafting sockets for setting diamonds apart from the carvings in jewellery.

"The growth rate is very exciting. Demand for platinum jewellery has been appreciating largely because of its delicate and fancy look, which augurs well for the younger generation," said Preeti Mehta, manager, diamond showroom of Mumbai-based Tribhovandas Bhimji Zaveri.

In 2006, around 500 kg platinum was sold in India, compared with a modest 100 kg in 2001, said a senior official of Mumbai-based Shrenuj & Co. "Compared to other metals, platinum is more strong and pure. This enables setting of diamonds more easier," the official said.

Buyers are also getting hooked to platinum due to its property of being a precious metal, said a jeweller based in Bandra, Mumbai. Global demand for platinum in 2006 was seen rising 5 per cent to 7.02 million ounces due to good demand from automobile and jewellery sectors.

"Supply is a constraint as there are operational glitches in the mines of Russia and South Africa," said a consultant at GFMS, a global precious metal research firm. Also, higher disposable incomes are likely to keep the demand for platinum in the positive zone, said the official at Shrenuj.

In 2004-05 (Apr-Mar), India's average annual per capita income stood at Rs 23,222.

Despite favourable factors, lack of resale and mortgage value of platinum is seen acting as a hurdle to the growth in its demand, officials said.

"Unlike gold, platinum does not have any resale value and once crafted, it is very difficult to alter the size," said Ramana Sai, manager, diamond segment, of Chennai-based Kirtilal Kalidas.