The platinum jewellery market is showing signs of resilience in the wake of the Covid-19 pandemic, supported by new research into consumer sentiment, says the World Platinum Investment Council (WPIC).
In a newsletter by the council, published on September 16, it notes that jewellery is the second-largest demand segment for platinum, and accounted for 25% of platinum demand in 2019.
Platinum’s rarity and precious metal status has led to it becoming the world’s premier jewellery metal, with research having shown platinum to be the metal most associated with love.
Although, while the expansion of platinum into global jewellery markets is rooted in buyer behaviour in the bridal and gifting sectors, the trend of self-buying is increasing.
There is no doubt that demand for platinum jewellery has suffered as a result of the negative impacts of the Covid-19 pandemic, with disruption caused by lockdown-related store closures combined with fragile consumer confidence, the WPIC laments.
In the first half of this year, platinum jewellery demand was down 27% year-on-year.
However, the forecast for the full year anticipates some recovery in the second half, with yearly demand estimated at over 1.8-million ounces, some 287 000 oz (14%) less than the previous year.
Even prior to the pandemic, platinum jewellery was experiencing strong competition from other precious metals, especially in the key China market which, in 2019, accounted for 41% of the world’s platinum jewellery consumption.
Despite turbulent trading conditions, the WPIC refers to recent research by Platinum Guild International (PGI) into the effects of the pandemic on consumers, which suggests that the platinum jewellery market is well positioned to benefit from prevailing buyer attitudes.
As part of its survey, PGI interviewed over 1 000 jewellery buyers and wearers in each of platinum jewellery’s four key markets – China, Japan, the US and India.
The survey focused on jewellery-specific sentiment, general consumer attitudes and behaviours, as well as the impact of Covid-19 on everyday life, relationships and expectations for economic recovery and jewellery consumption.
Crucially though, PGI’s findings indicate that, notwithstanding the current time of uncertainty, scope exists for growth in gifting as consumers seek to strengthen bonds with loved ones through meaningful fine jewellery purchases, as well as intending to spend more money than usual on jewellery for themselves.
The WPIC says that, with more than 40 years of experience in developing the platinum jewellery market, the PGI tapped into changing consumer trends which have been accelerated by the pandemic, such as the increased importance of maximising digital channels, not only to facilitate online sales, but also to reinforce narratives that reflect the meaning behind the purchase of a piece of platinum jewellery.
In the critical China market, signs of a bounce-back are already under way, as China’s jewellery sector recorded a strong recovery in the second quarter compared with the first, with platinum jewellery fabrication having increased slightly, by 1%, or 2 000 oz, year-on-year, as a result of new product launches and promotions.
Demand in the second half of the year is expected to be similar to 2019 levels, although the relatively low platinum price, made more attractive by recent strong gains in the price of gold, is also aiding the recovery in China, which allows platinum to regain some market share from other jewellery segments, including the pure gold and gold alloy or ‘K-gold’ segments, the WPIC states.