* 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.
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."