TOKYO, May 16: When a Japanese woman gets married she was much more likely to choose a wedding ring made of platinum than one made of gold.

A steady rise in demand in Japan for platinum rings, especially wedding and engagement rings, reflects a preference for "white" jewellery, precious metal industry sources say.

The growing popularity of platinum among younger people is also helping keep platinum jewellery demand relatively solid despite a slump in Japan's jewellery market, they say.

This is in sharp contrast with gold jewellery, which continues to suffer from poor sales and rising competition from imported jewellery.

Even so, platinum jewellery demand in calendar 1997 is likely to be flat at best, and possibly slightly lower, amid tough conditions in the jewellery industry, they said.

Most popular platinum wedding rings range in price from 30,000 yen ($256) to 40,000 yen ($341), about the same as the most popular gold rings. Engagement rings cost 10 times more.

But the market share of platinum wedding rings is about 80 per cent while that for gold rings is only four per cent. The rest are a mixture of gold and platinum.

Japan's platinum jewellery demand in 1996 stayed at a record 46 tonne level set in 1995, according to the Platinum Guild International (PGI), which promotes sales of the metal.

Jewellery accounts for about 70 per cent of overall platinum demand in Japan, the world's largest consumer of the metal. South Africa is the largest producer of platinum.

"In recent years, demand for platinum jewellery used in the bridal market had increased. In the market for wedding rings, platinum's share rose to about 80 per cent last year, compared with about 30 per cent in 1990," said Ayako Uchino, senior manager of public relations at PGI.

In the past, wedding ring sales were dominated by rings containing a mixture of gold and platinum.

Rings account for about 50 per cent of overall platinum jewellery demand, PGI said.

The popularity of "Platinum 1000", which has a platinum content of over 99 per cent, compared with 85 or 90 per cent for traditional alloys, has contributed greatly to growth of platinum wedding rings, Uchino said. She said "Platinum 1000" has more growth potential.

The number of Platinum 1000 or pure platinum item shall marked by the Japanese Mint in the first three months of this year rose by 17.5 per cent from the same period last year.

Makoto Tonoki, general manager of Tanaka Kikinzoku Jewellery KK, said platinum jewellery demand is likely to be steady at around 46 tonnes this year.

"Although gold jewellery sales have not been good, 'white coloured' jewellery has sold relatively well. Young women who used to buy silver are tending to turn to lower-priced platinum jewellery," said Tonoki, whose firm is a jewellery arm of Japan's biggest bullion house, Tanaka Kikinzoku Kougyo.

Platinum sales in March were good ahead of a rise in the sales tax to five per cent from three per cent on April 1, but April sales fell slightly, industry sources said.

But with more bankruptcies of jewellery firms looming after big jewellery retailer Coco Yamaoka were bankrupt earlier this year, it was difficult to see demand for platinum jewellery increasing, they said.

Coco Yamaoka, which specialised in diamond jewellery, had 112 shops nationwide and ranked sixth among Japan's jewellery retailers, said Teikoku Databank, a private credit research firm.

"As the jewellery industry has shown little sign of improving, platinum jewellery demand is expected to decline this year," a trader at a trading house said.

Japan's jewellery market has been shrinking gradually since the bursting of the country's "bubble" economy of inflated asset prices in early 1990.

Cumulative platinum imports in the first three months of 1997 totalled 17.79 tonnes, down from 17.96 tonnes in the same period a year earlier, according to Finance Ministry data.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.