Wedding ring price is soaring. Economical car is a reason behind
7, 17. 2007
The price of wedding rings being sold by the long-established jewelry shop Tanaka Kikinzoku Kogyo to mark the 120th anniversary of its establishment will be raised from the present 29,000 yen each to 35,000 yen from Sept. 1, 2007. The rise reflects the current sharp increase in the international platinum prices.
Platinum price has tripled in past 10 years
Strong demand for economical cars is pushing up platinum prices.
The platinum prices in New York averaged 397.48 dollars per troy ounce in 1996. It went up by about three fold at 1,140.69 dollars in 2006. As of July 3, 2007, the price had gone further up to 1,288 dollars.
Tanaka Kikinzoku, which deals with gold and platinum for industrial and decoration uses, said, "A large amount of platinum was used primarily as catalyst in auto manufacturing in the past. But, three years ago in 2004, a special procurement from China could be another factor for the price increase."
According to the company, 240 tons of platinum were supplied in the year of 2006. Of them 130 tons were used as catalyst in car manufacturing and 50 tons for jewelry and other decorations. Platinum is popularly used for making wedding rigs, but they accounted for 20% of the decorations. The amount of platinum used for decorations has been decreasing for the past years.
Platinum is used in the auto industry for the production of exhaust gas cleaning devices of economical cars. The more popularization of economical cars, the higher the demand for platinum. This is likely to further push up the platinum prices. Tanaka Kikinzoku said, however, that the supply and demand of platinum is currently well balanced, although the catalyst for auto manufacturing is in strong demand. "Because," the company explained, "South Africa, the platinum producing country, is pushing up the production, while platinum used as the catalyst in the auto industry is recycled."
Worldwide money glut is pushing up speculative investments in jewelry
Platinum, in the meantime, is also drawing attention as a new object for speculative investment. The market for platinum trading is of a small scale compared with that for gold. Because of this, the platinum market prices tend to move widely in accordance with changes in the world economic and financial conditions. Large amounts of speculative investments are now flowing into the stock, bonds, real estate, and jewelry. While investments are coming in, platinum prices are bullish. If too much investments are made, however, the prices will turn to bearish.
Asked by J-CAST if the platinum prices are seen to continue to rise for some while, Tanaka Kikinzoku replied:
"It is certain that the prices are firm. It is important to keep a careful eye on the catalyst demand from the car industry and the movements of the speculative investments."