Platinum Demand on the Rise Due to Jewelry Use

Platinum demand ticked up in Q1 2018 thanks to the precious metal‘s use in jewelry, which made gains in Japan, the US and India

In India, retail sales even outperformed sales of gold and diamond jewelry, Platinum Guild International (PGI) reported on Wednesday (June 6).

India’s platinum consumption soared 25 percent in Q1, with the
US and Japan following behind with increases of 12 percent and 2
percent, respectively. “India’s economy returns to strong growth,
and the implementation of GST will continue to benefit the
organised trade,” PGI stated.

“Partners reported robust growth in the first quarter, mainly
contributed by heavier products sold by retailers,” the firm
added.

Growth in India predominantly came from retailer Platinum Evara,
as well as from a spike in men’s jewelry, both of which increased
the average weight of platinum jewelry sold.

“With continued efforts on driving sales and benefits from
working with organised retailers, platinum sales among PGI retail
partners is anticipated to grow at 20-25 percent in 2018, with a
stronger outlook for manufacturing demand to grow at 30-40 percent
due to store expansion,” PGI noted.

For the US, continued gross domestic product growth combined
with a low unemployment rate, strong consumer confidence and tax
reform resulted in stronger jewelry sales.

The majority of the platinum jewelry sales in the US were
attributed to bridal jewellery such as engagement and wedding
rings.

“Platinum Born, the new branded collection of platinum jewellery
from Japan to target female self purchase, was launched at the
Centurion Jewellery Show and has begun hitting stores,” PGI
revealed.

“In the US, platinum has mainly appeared in engagement rings and
wedding bands. Platinum Born introduces a new category of platinum
jewellery accessible to a wide range of consumers,” it added.

Going forward, the PGI anticipates another strong year for US
platinum with a projected business increase of between 8 and 11
percent.

While Japan’s platinum demand was on the lower end for Q1 2018,
it remained steady. Retailers with heavier representations of
platinum sales were able to enjoy higher profitability compared to
selling gold jewelry due to low platinum prices.

PGI stated, “Q1 platinum performance on a unit sales basis was
up 0.1 percent compared to same quarter of 2017.

The firm added, “[o]ther than yellow gold, platinum was the only
fine precious metal jewellery that showed a slight increase in unit
sales. It is likely that yellow gold items were of lower price
points than platinum jewellery.”

Overall PGI is positive on 2018, especially for platinum
jewelry. Total retail sales of platinum jewelry in Japan are
anticipated to grow 1 to 2 percent for 2018, mostly due to the
non-bridal segment.

Despite increases in India, the US and Japan, China saw some
decreases in platinum demand in Q1 that jewelry demand could not
stop.

In manufacturing, PGI noted, “[p]latinum jewellery fabrication
volume declined by 8 percent year-on-year in Q1, while gem-set
fabrication increased by 7 percent year-on-year.”

And in retail the report stated, “PGI trade partners encountered
a 9.2 percent year-on-year decline in Q1 2018 due to weak Chinese
New Year sales.”

However, optimism remains despite less than 30 percent of retail
partners reporting platinum business growth in Q1, as bridal sales
were stable and remain the key driver for platinum sales.

PGI noted, “penetration within lower tier cities continues to be
a key future growth opportunities.”

This article provided by NewsEdge.