THEME: CHINA/PLATINUM
BBC article on platinum

Friday 15 August 2003

China Platinum

China has allowed the Shanghai gold exchange to start trading in platinum. The aim is to stop the smuggling of the precious metal. For now, it is not necessary to pay the normal seventeen percent value added tax on platinum. China is the world's biggest market for platinum jewellery. This report from Francis Markus:

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China's fashion conscious urban young are developing a growing appetite for the cool white look of platinum jewellery.

The country now accounts for fifty-five percent of the world market and the consumption is increasing fast so it is hardly surprising that there is rampant smuggling of the precious metal which comes mostly from countries like South Africa, Zimbabwe and Russia.

To try to regulate the market, the Chinese authorities have this week allowed Shanghai's gold exchange to start trading in platinum too. As an encouragement, all transactions, for now at least, are free of the normal seventeen percent value added tax.

The move comes at a strategic time for the industry with high demand from couples who plan to get married in the popular wedding month of October, but the platinum producers also have their eye on China's vast market in the longer term for another key, if less romantic, use of the metal in car catalytic converters to cut exhaust emissions.

Another article about demand...

China's platinum demand in Q1 reaches 560,000 ounces, exceeding Japan's



Platinum sales in China continued to grow in the first quarter and reached 560,000 ounces, exceeding Japan's demand for the first time. Robust demand from the jewelry and manufacturing industries has driven up sales.

Demand for platinum in China jumped 53% in 2001 over the previous year to 1.2 mln ounces, much higher than the average demand growth rate of 19% in the international market, Guoji Jinrong Bao reported.

Shenzhen is China's refining center for platinum, handling 70-80% of the wholesale volume in the country. Raw materials are supplied by neighboring Hong Kong, and the price of 90% pure platinum has reached RMB 141.7 (USD 17.11) per gram, and that of 95% purity RMB 143.9 (USD 17.38).

Demand is expected to remain strong in the latter half of this year. The jewelry trade in the single largest platinum market in China, followed by catalytic converter, TV, computer monitor, and optical fiber manufacturers. (Source: Interfax)