Anglo Platinum (Angloplat) saw demand for platinum jewellery as a key factor supporting prices, with supply seen growing in the next five to 10 years, a company executive said yesterday.
The South African mining industry was planning to boost output to meet growing demand for autocatalyst and industrial uses, Angloplat executive commercial director Sandy Wood said at a seminar in Tokyo.
But demand for platinum jewellery would be the key to support prices in the future after seeing demand for jewellery fall since 2002, Wood said.
"We do think that should have a moderating effect on the price, but how far the price comes down over time will depend on how well the jewellery industry recovers to absorb the extra ounces at a lower price."
Angloplat is the world's biggest platinum producer and accounts for about 40 percent of global platinum production.
"We see the jewellery industry playing a very important role in our overall demand structure because the jewellery industry is more price sensitive than any other industrial use," he said.
Sales of platinum as jewellery tend to fall when prices go up sharply.
In Japan, fresh demand for platinum for jewellery use dropped by about 30 percent to 17.1 tons in 2005 from 24.3 tons in 2002.
Wood said demand for platinum exceeding supply in the past several years coupled with the weakening of the dollar were key factors that had pushed up prices to more than $1 200 a ounce from $450 in late 2001.
Wood said the inflow of investment and speculative money in platinum was another reason behind the high prices. He hoped the jewellery industry would be able to buy more new platinum and support prices from going down too far. Platinum reached a record high of $1 336 an ounce on May 17