Worldwide demand for platinum from jewellery fabricators dropped 5% year-on-year to 555 koz during the three month period ended June 30, 2019 the World Platinum Investment Council (WPIC) said in a recent quarterly update.

A decline of 30 koz during the quarter, in what WPIC described as “generally a difficult quarter for jewellery”, was largely on account of continued decline in Chinese demand, WPIC said. However, it added that the rate of decline was similar to that experienced during Q1 2019.

The publication said that in China, the excessive platinum stocks that built up in 2018 continued to be drawn down through 2019. A sharp fall in jewellery retail sales in Hong Kong further impacted the requirements for new metal, the report stated, pointing out that the slight improvement in overall jewellery retail sales in China had largely benefitted gold rather than platinum.

WPIC described Japan as a “bright spot”, with growth of 6% year-on-year in Q2’19 after two quarters of negative growth. Jewellery sales in this market were boosted by the arrival of the new era of Reiwa on 1 May, after the abdication of Emperor Akihito, which was marked by extra holidays added to the Golden Week season at the end of April.

In the US, the picture remains mixed, the report said, with jewellery retail sales contracting and tourism spending on jewellery going down. Nonetheless, purchasing of platinum by manufacturers has held up, WPIC reported. Similarly, in Europe, jewellery retailer sales are down in all major markets, but hallmarking figures increased by 5% year-on-year in Q2’19.

Looking forward, WPIC said that global jewellery demand for platinum is projected to fall by 5% to 2,215 koz in 2019, largely due to lower demand in China.

WPIC expects Japan’s platinum jewellery demand to remain largely flat in 2019. Relatively strong demand is anticipated in Q3’19, but this is partly due to expected pre-buying ahead of the scheduled sales tax increase from 8% to 10% in October that is likely to impact jewellery purchasing in the final quarter.

Similarly, the organisation believes that European demand for platinum is set to remain largely static in 2019. Lower platinum prices are helping to boost platinum jewellery sales, as reflected in higher hallmarking statistics which were particularly strong at the beginning of the year, but this is against a backdrop of a difficult retail environment where sales have been falling.

Elsewhere, US demand is forecast to rise modestly in 2019, primarily due to lower platinum prices, more platinum products and continuing consumer confidence. However, as in other regions, jewellery retail sales as a whole are coming under pressure.

In India, platinum jewellery demand faces several headwinds in 2019 but is still expected to see double-digit growth, though at a slower rate than over the last two years.