Global Demand for Platinum Recovers Thanks to China’s Jewelery Sector

Like the rest of the precious metals, platinum has suffered the consequences of the Covid-19 pandemic. Jewelry, one of its main demand segments, collapsed due to the closure of shops and the reduction of consumers’ incomes. It resulted in a drop in sales. However, it seems that the situation is beginning to recover.

In its latest report, the World Platinum Investment Council confirms that global demand for platinum by the jewelry industry has bounced 32% in the second half of the year.

Demand has grown in the third quarter to 498,000 ounces, 27% more than the previous quarter.

If the figures are maintained, it is estimated that the fourth quarter of the year will close with 539,000 ounces. It would represent a 6% increase compared to the same quarter of the previous year.

For 2021, estimates speak of an increase in global demand for platinum by the jewelry sector by 13%, to 2,072,000 ounces. It would represent the first year-on-year increase since 2013.

As the report of the World Platinum Investment Council explains, the key to this comeback is in the improvement of the situation of the Chinese jewelry market. Its demand has grown by 14% year-on-year in the third quarter of the year. In fact, it is expected to grow close to a 10% YoY in the fourth quarter. It is usually a time particularly favorable for sales.

Predictions show the continuation of the Chinese market’s recovery

Next year, platinum demand forecasts growth in the jewelry sector to 926,000 ounces. That would be its highest figure in the last three years.

External factors have been the end of the restrictions derived from the Covid-19 pandemic, the development of new designs, and the launch of marketing campaigns. Besides, the metal’s price level is moderate.

Last March, the fall in the price of the metal and the imposition of restrictions on travel between Hong Kong and mainland China caused China’s jewelry manufacturers, particularly based in Shenzhen, to import more platinum than usual at this time.

Total imports for March reached 635,000 ounces, the highest in history. The fact that traders had accumulated such a stock, at such competitive prices and the rapid rebound in the metal price allowed the increase in production. They also benefited from the high price of gold, which led to increased sales of more affordable platinum jewelry.