Gross consumption of platinum in jewellery fell by 17% in 2020

Gross consumption of platinum in jewellery fell by 17% in 2020, as fabrication demand in the large Chinese market fell below one million ounces for the first time since 2005, according to Chemicals company Johnson Matthey.
It said in its latest platinum group metals (PGM) market report that the Chinese demand was weak during the first half of 2020, due to extended store closures, low footfall following the reopening of retail outlets during February and March, and consumers' reluctance to spend on luxury goods during the initial post-lockdown period. 
"However, platinum jewellery fabrication surged in the third quarter, largely as a result of record gold prices, which made karat gold jewellery significantly harder to sell and more expensive to stock," reads the report. 
"This, in turn, encouraged Chinese retailers to rotate their stock and to devote more counter space to platinum. Momentum was lost during the fourth quarter, as greater visibility of platinum jewellery on shop counters failed to translate into significantly higher sales." 
It said with the gold price slipping lower, and platinum moving above $1,000, the financial incentive to increase platinum jewellery stocks also began to wane. 
"Other regional jewellery markets are much less price-sensitive, and demand trends were primarily driven by Covid-related changes in consumer spending and behaviour," said Johnson Matthey. 
"During the early stages of the pandemic, US platinum jewellery demand was severely hit by lockdowns and a collapse in consumer confidence."
However, from mid-2020, there was a remarkable recovery in consumer spending on durable goods.
This reflected not only government policies such as stimulus cheques, but also changes in consumption patterns, as individuals diverted spending away from travel and other services towards consumer goods.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished