A report by the World Platinum Investment Council (WPIC) shows that marriage rates around the world have fallen over the past decade, contributing to a steady decline in demand for platinum jewellery.
According to the WPIC, declining marriage rates and shifting consumer preferences have served as headwinds for jewellery markets in recent years, with precious metals like gold and platinum taking a hit as a result.
Between 2000 and 2022, marriage rates in the US, Europe, China and Japan declined by between 1% and 2% a year on average. Since peaking in 2013, China’s marriage rates have fallen at an average annual rate of 7% — particularly notable given China’s outsize role in platinum jewellery markets.
The same trend can be seen in SA, with administrative data on civil marriages indicating a “notable downward trend in marriage registrations”, according to Stats SA. In SA the number of marriages in 2022 was 29.5% lower than in 2013.
“There are several reasons for structurally declining marriage rates, but the general conclusion is that societal pressures to marry have eased due to less gender discrimination across education and the labour force, which has led to broader economic inclusion,” said the WPIC.
While discussions around falling platinum prices have tended to focus on platinum’s industrial uses, as electric vehicles (EV) threaten to reduce the demand for catalytic converters, platinum’s role in the jewellery industry is often overlooked.
However, jewellery is a core component of platinum markets, making up roughly a quarter of total demand for the metal — and headwinds on jewellery demand are not a trivial part of platinum’s downfall over the past decade.
According to the WPIC, platinum jewellery demand has declined from 3Moz (millions of ounces) in 2014 to 1.9Moz in 2023, decreasing at an average rate of 4.4% a year during the period.
On top of declining marriage rates, shifting consumer preferences have also translated into weaker platinum jewellery demand, with consumers spending more on experiences, such as travel and dining, and experienced-based goods such as cars and wine.
According to Bain and Co, revenue growth in the luxury goods markets, which includes jewellery, was outpaced by the growth of spending on experiences and experienced-based goods between 2010 and 2023.
However, platinum jewellery demand is expected to improve this year as China’s share of total demand shrinks, with Chinese markets being the primary drivers of declining jewellery demand in recent years.
Between 2014 and 2023, China’s platinum jewellery demand declined by an average of 13% a year, while demand from the rest of the world increased by nearly 4% annually, driven primarily by US economic growth, greater adoption by Europe’s luxury markets and the rapid expansion of India’s emerging market.
With the non-Chinese market now around 3.5 times larger than China’s, its growth would offset China if the country continued its trend of weaker demand, said the WPIC.
Further encouragement for platinum jewellery demand comes from rising gold prices, which have resulted in platinum jewellery trading to parity with white gold jewellery, platinum’s direct competitor in the jewellery market.
With gold prices hovering around record highs, the premium on platinum jewellery retail prices compared to that of white gold has narrowed, giving platinum an improved value proposition for both consumers and producers.
For fabricators, platinum now offers a greater margin opportunity than white gold, with low platinum prices reducing production costs and increasing profit margins, incentivising retailers to stock more platinum products.
Advancements in fabrication technology are expected to reduce manufacturing costs further, as “replicating the success in gold jewellery markets, platinum jewellery technology developments are improving jewellery properties and production efficiencies”.
Even if these cost savings are passed on to consumers, lower retail prices are still likely to push up demand. As a result, the WPIC estimates that each 2% reduction in costs — from falling prices or technological advancements — results in a 1% increase in platinum demand.
At the same time, platinum’s superior physical characteristics, including being less susceptible to fading and more durable than white gold, are starting to shine through for consumers, which supports switching to platinum jewellery.
The WPIC forecasts that platinum jewellery demand troughed in 2023, with demand expected to grow by 5% in 2024 and 2% this year.
“While it may be too early to tell whether, or by how much, platinum jewellery demand could benefit from switching, risk management or technology advancement, any share gains from white gold have compounding impacts for platinum markets,” it said.
Assuming platinum jewellery gains a “modest” 5% share of the white gold market, this would deepen the average platinum market deficits by 12%, with deeper deficits likely to accelerate the depletion of above ground stock, potentially supporting a lift in platinum prices.
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