China Platinum Imports Rise – Bullish Platinum and Palladium Fundamentals
Gold Core
GoldSeek.com
Wednesday, 22 May 2013
Net platinum imports into China jumped to 8.9 metric tonnes last month, marking the strongest inflow in about a year according to UBS.
This reflected a 14% increase from March, and year-on-year growth of 29%. The trade data coincides with strong platinum volumes on the Shanghai Gold Exchange (SGE), which coincidentally also totalled 8.9 tonnes for the whole month of April, the strongest turnover since September 2011. The fall in prices towards $1,400/oz prompted a pick-up in physical buying.
Jewellery demand was cited by UBS as the main source of the physical buying.
While gold is still the more popular precious metal in China, platinum jewellery has also enjoyed an improvement in demand. Johnson Matthey estimates a 14% increase in net global platinum jewellery offtake last year, with China accounting for a large portion of the increase. The expansion in the number of retail outlets across second and third tier cities in China has contributed to the growth in platinum jewellery demand.
Although platinum’s discount to gold in 2012 did not necessarily translate into relatively cheaper platinum jewellery at a retail level, better margins would have encouraged sellers to exert more effort in promoting platinum. The surge in China’s platinum imports and increased SGE activity in April is a reflection of the physical demand response to the price drop, similar to that seen in gold.
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