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Global Platinum Jewellery Demand Down by 4% in Q3 2019


Global demand for platinum jewellery was down 4% at 545 koz in Q3’19 compared to the same quarter last year, but remained flat quarter-on-quarter, the World Platinum Investment Council (WPIC) reported in its latest bulletin.This was largely on account of continued shrinking of demand in China, though the fall there was offset by an uptick in consumption from Japan and a seasonal increase in India, WPIC said.

According to the bulletin, platinum purchases from the Shanghai Gold Exchange (SGE)by jewellery end-users endured another double-digit drop year-on-year for the quarter. Fabricators and vertically integrated retailers were winding down their inventory as companies continued to report higher fabrication numbers than both their purchase and sales numbers, it added.Official statistics for jewellery retail sales indicated a dip of 5% year-on-year in Q3’19.

As higher metal prices and shifting consumer preferences dampened demand. Reduced GDP growth and higher gold prices have impacted footfall in jewellery stores in India, thereby limiting platinum jewellery demand growth to 10% year-on-year in the third quarter, WPIC reported.Turning to other major markets, WPIC said that in Japan, jewellery demand has fluctuated throughout the year, but was up in Q3’19 as consumers rushed to purchase ahead of the increase in consumption tax to 10% on 1 October. Meanwhile, North American demand was down 6% year-on-year owing to a difficult jewellery retail environment which is undergoing major restructuring whereby traditional stores are closing in favour of online retail.

Based on these trends and other projections, WPIC expects global platinum jewellery demand in 2019 to reach 2,160 koz, down by 6% compared to 2018 levels, primarily on account of the ongoing pullback in Chinese jewellery demand is the primary. The country still accounts for around half of the world’s platinum jewellery consumption.For the year, China is likely to see another double-digit decline in platinum jewellery demand in 2019 from 1,155 koz in 2018, as the industry adapts to changing consumer habits towards lower price points, leading to lightweight pieces. This works against platinum’s inherent density properties, although new lightweight designs are steadily coming to market. Activity on exchange and imports are expected to remain tepid as major players are likely to continue to draw down inventory.Elsewhere, platinum jewellery demand is set to remain flat year-on-year, with steady growth from India helping to offset slight contractions in North America and Western Europe.

In summary, WPIC says that 2019 has been a particularly difficult one for the jewellery industry. US-China trade wars impacting tourism spending, a softer economic environment, restructuring of retail towards online channels, the high price of gold and the shift to lighter-weight jewellery pieces have all had a negative impact on platinum demand.

Looking forward to 2020, WPIC forecasts demand to fall at a slower rate, mainly as excess stocks are wound down in China and new lightweight jewellery designs help to offset declining sales of heavier pieces. Nonetheless, it will remain a difficult task to recover platinum jewellery sales growth in China. On this basis, demand in China is projected to drop below 1 moz for the year and global jewellery demand forecasts indicate a 2% contraction, WPIC concludes.

Source: GJEPC

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