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North American appetite has flourished despite lackluster global
platinum jewelry sales, with world consumption down for a second
year in 2015 as slowing growth and a shift in consumer tastes
helped crimp buying in lead market China.
Platinum's appeal for North American jewelers has been boosted
by a sharp drop in prices <XPT>, which hit seven-year lows just
above $800 an ounce in January, down 65 percent from 2008's
all-time high.
That has driven up margins for the finished product.
"Margin is absolutely pivotal, and that has been exceptionally
attractive," Metals Focus analyst Philip Newman said.
"When you have better margins, it becomes a virtuous circle.
When margins are better, jewelers are better disposed to take
platinum, advertise it, and through advertising, boost sales."
Platinum Guild International says that a piece made in platinum
is more than twice as profitable for the jeweler as a similar
piece made in white gold.
While the metal is now trading at a historically unusual
discount to gold of more than $200 an ounce, the price of the
final product still tends to be higher.
"If you take a piece in platinum and a piece in white gold, the
platinum will still be more expensive. Platinum is heavier, it's
more dense and it's more pure," PGI USA's president Jenny Luker
said.
Bridal remains by far the biggest sector for platinum jewelry
demand, but its appeal is starting to spread.
"It has a lot of great attributes," Luker said. "People are more
comfortable setting stones in it because it's going to hold them
more securely. It's hypoallergenic. Customers come to it
sometimes because they're looking for an heirloom piece."
"It's the quality," she said.
(Reporting by Jan Harvey, editing by David Evans)
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