Platinum is now the “love” metal of choice in jewellery, thanks to the hard work of Platinum Guild International, which was founded in 1975 to boost demand.
Platinum companies Anglo American Platinum, Northam Platinum, Lonmin, Impala Platinum, Royal Bafokeng and Sibanye-Stillwater fund the non-profit organisation.
With platinum prices at historic lows - the metal has been trading at around $775 (R11444) an ounce this week - the sale of jewellery has become important to boost demand for it, with sales focused on China, Japan, India and the US.
Huw Daniel, the chief executive of Platinum Guild International based in Hong Kong, said the organisation, with a staff of 50, had a three-pronged approach to promote platinum jewellery sales.
“We work with consumers to create awareness and to understand the unique characteristics of platinum. We work with manufacturers to look at design trends and education, and we work with retailers on in-store selling.”
Jewellery is the second-biggest demand-source for platinum after autocatalysts, and was expected to generate roughly 2.5 million ounces of demand in 2017 and the same amount this year.
Daniel said the jewellery industry had been caught on the back foot regarding the buying habits of millennials, and had to adapt to cater for their needs.
“It was a painful transition,” he said. “Millennials have different tastes and needs. When a jewellery collection is marketed to millennials, it does very well.”
He said jewellery for the age group was more design-focused and incorporated “a name (brand) and story that is relevant to the millennial”.
The guild also came up with a clever strategy to promote platinum as a love metal, creating a narrative around it.
The guild said platinum had become more strongly associated with love than any other metal, 2.5 times more than pure gold.
In China, platinum jewellery was mostly bought for “love-gifting” - giving gifts on special occasions. Valentine’s Day accounted for 7% of sales, anniversaries 14%, bridal events 20% and birthdays 27%.
China was the largest platinum market, with 1.7 million oz of manufacturing demand.
Daniel said China had the potential to generate up to 2.7m oz of manufacturing demand .
He said platinum love-gifting had been introduced in India, which had no history of platinum. The guild had started targeting India in 2000. “We had several years of trial and error in introducing platinum to the market. In 2007/08 platinum demand took off when India bought into the concept of ‘the platinum day of love.’”
Daniel said the guild had seen a gap in the market in India, where arranged marriages and dowries were associated with gold.
The guild saw an opportunity for platinum to be seen as an expression of love between young couples, whose relationships were increasing based on gender equality. Platinum had now become the metal of choice in jewellery for young people in urban areas. Couples also exchanged platinum jewellery before or after an arranged marriage to symbolise their love. The guild had forecast demand for platinum in India to rise by 20 to 25% this year.
Japan was the second-biggest market after China and was the most mature platinum market, he said. It had the highest per-capita consumption rate in the world.
Japanese consumers bought into the notion of purity, which is a fundamental concept of the Shinto religion. Platinum had a purity level of 95-99%, versus 18 carat gold at 75%.
“Gold is seen as nouveau riche and gaudy. Diamonds are seen as flash,” Daniel said.
The guild expected the market in Japan to grow 1-2% this year.
In the US, growth was forecast at 8-11% for this year.
Daniel said this market’s focus was on diamonds in jewellery and the precious metal played a less important role in desire than in Asian markets.
Platinum had a 15% market share of the diamond engagement ring and wedding band market. With the price of platinum trading at an historic low, it had become more affordable, leading to more consumer interest.
With a positive platinum jewellery forecast in China, Japan, India and the US, the resilient metal is feeling the love on the road ahead despite industry woes.