* Chinese palladium jewellery demand slides
* Two organisations market palladium jewellery
* Marketing targets designers, manufacturers
By David Brough
LONDON, Dec 11 (Reuters) – The best efforts of top designers
have failed to persuade many buyers that palladium, a cheaper
cousin of platinum widely used to clean car exhaust fumes, is
just right for jewellery.
The campaign is stumbling due to sliding sales in China and
a persistent preference for gold and platinum in much of the
world, while marketing is steered by two rival bodies.
Luxury jewellers such as Stephen Webster and Vivienne
Westwood have included palladium pieces in their collections.
“Palladium is light, strong and white – it’s a question of
how you communicate that to the public,” said Webster, who has
designed jewels for rock stars like Madonna and Christina
Aguilera.
Palladium is popular in wedding bands for men because it is
lighter and more affordable than platinum, and it has the
advantage over costlier white gold of not requiring any coating.
But palladium jewellery demand has slid since a rapid surge
in demand in China in 2003-2005, when platinum prices jumped,
eroding platinum jewellery sales margins.
Spot palladium was trading on Tuesday at around $693
an ounce, well below gold at $1,710 an ounce and platinum
at $1,628.
Palladium jewellery demand in China peaked at 1.25 million
ounces in 2005, according to refiner Johnson Matthey.
Global palladium jewellery demand in 2012 was set to fall 11
percent year-on-year to 450,000 ounces, and slide 21 percent in
leading market China to 240,000 ounces.
Chinese manufacturers have shifted increasingly away from
palladium due to rising demand for gold, said Jeremy Coombes,
Johnson Matthey marketing manager.
As a much harder metal, palladium is also more complex for
jewellers to work.
“Manufacturers have looked at their capacity and switched to
gold,” Coombes said. China is vying with India as the world’s
top gold consumer this year.
Palladium finds a major use in catalytic converters that
clean exhaust fumes – chiefly of gasoline-powered vehicles.
Gross demand for use in autocatalysts was forecast to grow by 7
percent this year to a record high of 6.48 million ounces,
according to Johnson Matthey.
FRAGMENTED MARKETING
Coombes said palladium jewellery marketing efforts in China
were “mis-targeted” as they had concentrated on geographical
areas where sales were weak, rather than on the main buying
centres.
The marketing of palladium as a jewellery metal is led by
two organisations rather than one umbrella group, backed by
rival mining groups.
They are Palladium Alliance International, financed by U.S.
palladium and platinum miner Stillwater Mining Co, and
the International Palladium Board (IPB), supported by Russian
nickel and palladium giant Norilsk Nickel.
The two groups, with annual budgets totalling tens of
millions of dollars, each run their own marketing projects for
palladium as a jewellery metal.
They have recruited celebrities such as TV personality and
singer Kelly Osbourne, who appeared at a Las Vegas jewellery
show in June admiring, among other pieces, a palladium spider
brooch.
Actress Pamela Anderson, once married to a rock musician,
has helped to promote the lightweight jewellery with the slogan
that she is “so over heavy metal”.
The campaign launched last year was promoted by the
Palladium Alliance, which is focused on North America and China,
while the IPB directs its efforts chiefly in Europe, North
America and Asia.
The chairmen of both groups, contacted by Reuters, said a
generic global marketing campaign for palladium jewellery would
be more effective than the current campaigns, but they had no
plans to join forces.
Brad Mills, who heads the IPB, said of his group’s
relationship with the Platinum Alliance: “We talk to them. We
know what they’re doing. We try to coordinate and not step on
each other in any way.”
