Price shocks don’t deter Platinum lovers

KOLKATA: Jewellers in India do not see a drop in platinum consumption even though the metal has appreciated by almost 5 per cent in the past one month following stoppage of work in South Africa’s mines owned by Anglo American Platinum, Tampala Platinum and Lonmin.

Jewellers say consumers of platinum, who are largely aspiring urban youngsters, are willing to absorb a 15 per cent to 20 per cent hike in prices. Demand continues even at a time when gold prices are declining due to a strong rupee and global price slip. In the spot market, gold is selling around Rs 27,170 per 10 gram.

Platinum is priced at around Rs 3,000 per 10 gram. Talking to ET, Vijay Jain, CEO at Orra, said, "There exists a price differential of around 19 per cent between gold and platinum. And those who buy platinum are ready to take another 15 per cent to 20 per cent increase in prices. If price goes beyond this level, consumers will think again. Like gold, platinum is not marked to market. It is considered as an aspiring product among consumers, and they are ready to spend that extra buck to own it."

The Orra CEO added that rings and couple bands for men and women account for 60 per cent to 65 per cent of the platinum jewellery market. Interestingly , while a decade ago, platinum was more of a western India phenomenon but in recent years it has become a pan-India trend.

Even smaller towns and cities like Lucknow, Ludhiana and Nagpur are witnessing good demand. Orra had entered into platinum business around 2004.

Rajiv Popley, director of Mumbaibased jewellery firm Popley & Sons, said that unlike gold, platinum is not treated as a commodity. "Platinum is not a volatile product like gold. Price is an important matter but platinum does not give rude shocks. Moreover, till now, we have not faced any supply constraint due to problems in South African mines."

Incidentally, the price of US platinum bar rose 0.8per cent over the past week to $1,475 per ounce. This was the fourth week in a row of increasing prices. In 2013, platinum jewellery saw a strong growth of 41per cent in chain stores and independent stores. It was the fastest growing category in the Indian jewellery sector, according to Platinum Guild International’s retail trade barometer.