Demand for platinum and palladium jewellery declined significantly in 2014, according to the Thomson Reuters’ GFMS Platinum & Palladium Survey 2015 which was released on May 15.  While platinum demand dipped 3.4%s to 2.57 million ounces (Moz), palladium demand registered a 9% decline in volumes to 0.47 Moz during the year, the report said.

Jewellery now only has a 35% shares in platinum demand, down from a high of 45% at the start of the millennium, the report said. The drop was largely on account of weak demand in China (which accounts for nearly two-thirds of global platinum demand), Europe and Japan, though the US market did register a 3% increase.  Jewellery scrap supply for platinum increased 5% during the year, driven mainly by a 7% increase in China.

For palladium jewellery, this was the sixth consecutive year of decline in demand. This was mostly on account of the slowdown in China, where demand fell by 16% year-on-year. The Asian giant now has a 36% share in global demand, down from a high of 76% recorded in 2005. Jewellery scrap supply for palladium increased 3% during the year, driven mainly by a 9% increase in China.

In India, domestic jewellery fabrication demand for platinum rose by 24%, but on a relatively small base. The country’s share of global platinum jewellery demand increased from 2% to 3%.

The global consultancy also reported that the markets are expected to remain slow during 2015. Platinum will see a rise in supply coupled with a drop in demand and the average price is therefore expected to decline by 16% year-on-year to a $1,170 per ounce levels. The consultancy said that while there may be an immediate rise from current levels, the upper end would be $1,290, and added that it “would not be surprised if platinum tested $1,000 this year.”

The consultancy was more bullish on palladium price trends and foresees the metal reaching $940 before year-end. However, it said that the average palladium price in 2015 would broadly be flat year-on-year at $800, modestly above current levels.