Global demand for platinum jewellery fell to 665 kilo ounces (koz) in the second qurter of 2015, a drop of 11% quarter-on-quarter, the World Platinum Investment Council (WPIC) reported in its latest quarterly update released today.

In Q1 2015, jewellery demand was clocked at 750 koz, the report said, adding that the slowdown was seen across different regions as consumer demand remained sluggish despite the lower platinum price.

In China, demand was slower in Q2 than Q1 partly on account of the New Year sales that take place in the first quarter, but also due to lower footfalls in jewellery stores. The WPIC notes that this is more in line with the propensity of Chinese consumers to increase purchasing in a rising price environment.

WPIC reported that platinum jewellery sales held up better than gold, adding that the ongoing clampdown on the use of gold for unofficial gifting has impacted the gold jewellery segment.

A 17% q-on-q increase in platinum trading on Shanghai Gold Exchange has been attributed by WPIC to fabricators continuing to take advantage of falling prices to acquire inventory.

WPIC states that In India retail sales in the second quarter continued in line with the annual growth trend and should improve with the onset of the wedding season and the increased traction of Platinum Guild International’s (PGI) Evara bridal jewellery programme.

While retail jewellery sales in Japan were flat, in the US Q2 retail jewellery sales were sluggish, but platinum jewellery was the bright spot outperforming other jewellery as lower prices attracted more buyers.

Jewellery recycling, which is expected to decline 8% to 680 koz, is being negatively impacted by reduced sales volumes in China and also lower prices reducing recycling in Japan.

Looking forward, WPIC notes that “total demand is expected to expand by 3% to 8,355 koz this year as growth in automotive, industrial and investment demand more than offsets the decline in jewellery demand”.

Jewellery fabricator demand in 2015 is forecast to be 2,940 koz, a 2% decline from 2,990 koz in 2014. While China will continue to be slow, India is expected to see “at least 25%” increase in retail sales of platinum jewellery in 2015.

Pic caption: A necklace from the Platinum Evara collection (Courtesy PGI)