World Platinum Investment Council (WPIC) said in their 3Q report that the global jewellery demand is expected to contract by 3% (-48 koz) in 2023 to reach 1,852 koz. We have trimmed our European forecast growth for 2023 from the last Platinum Quarterly, from +4% to now show +2%, due to weaker-than-expected results for mass market / bridal jewellery, in part due to caution over stock build.
Growth, therefore, is ever more dependent on the still strong luxury jewellery and watch brands. Demand in North America remains forecast to dip slightly due to a normalisation in the number of weddings post COVID, consumer expenditure shifts and caution over stocks. The drop has been kept small due to wider price differentials to gold, which means platinum’s market share within bridal is felt to have grown notably.
As seen in the quarter Japanese demand for platinum jewellery disappointed compared to gold. Improvements in other segments failed to offset a weak bridal market. We have lowered our forecast for China in 2023, from a 7% to a 13% decline, to 420 koz to reflect a worse-than-expected Q3’23 performance and growing consumer preferences for quasi-investment and value-preservation gold product collections.
In India, we estimate 2023 fabrication to be around 184 koz, up 8% year-on-year. Aside from ongoing store expansions, retailers have started to actively promote platinum jewellery in order to help improve their profits by offering high-margin products. They are also focusing on the younger generation by offering innovative, light-weight everyday wear, and bi-metal (gold & platinum) jewellery options.
In 2024, despite global economic growth that is expected to be slower than 2023, at 3% based on the most recent IMF forecast, we expect the platinum market to remain in a deficit of 353 koz. The contraction of 718 koz compared to 2023 will result from higher supply, from both mine and secondary sources, as well as lower investment and industrial demand.
Overall demand will contract 6% (-487 koz) to 7,663 koz due to fewer chemical and glass plant expansion anticipated. In addition, we forecast some ETF liquidations as high interest rates continue to place pressure on non-yielding assets. Meanwhile, supply is expected to improve by 3% (+231 koz) as both South African mine supply and global autocatalyst scrap supply improve.
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