The latest Johnson Matthey interim report for platinum and platinum group metals revealed that outside China, the consumption of platinum in jewelley, which includes Swiss-made platinum watch cases, is forecast to rise by 7% to 890,000 oz in 2013, and in Europe demand will recover to 2007 levels, driven by the increased use of platinum in luxury watch cases, at the expense of yellow and rose gold.
Overall gross demand for platinum’s use in jewellery is on track to total 2.74 million ounces in 2013.
Explaining the forecasts for platinum watch cases, Johnson Matthey market analyst Dr Laura Cole said: “The number of Swiss-made platinum watch cases hallmarked reached a low point in 2010, a result of the economic crisis of 2008 and 2009 hitting the industry. Since then there has been a slow but steady recovery, until this year when the number of cases hallmarked rose strongly and now looks set to surpass the pre-recession peak seen in 2008.”
In 2013, 19,182 Swiss-made platinum watch cases were hallmarked in the first 10 months, which is an increase of 154%, compared to the same period in 2012. Cole commented: “Johnson Matthey expected an increase in platinum watch hallmarking in 2013 compared to 2012. However, the upturn was much stronger than anticipated, mainly because the industry only exhibited a slow recovery in the two preceding years.”
Despite this upturn in hallmarked platinum watch cases, the Federation of the Swiss Watch Industry (FH) said that the 2013 growth in value and volume terms for platinum watches relating to Swiss watch exports, compared to 2012, was not particularly significant. For the period January to September 2013, compared to the same period in 2012, the Swiss watch industry exports of platinum watches were up 5.5% in units and by 6.6% in value terms.
FH president Jean-Daniel Pasche said that it could not be surmised that a growth in platinum watches has come at the expense of gold because “the evolution remains rather stable”.
In September 2013, 44,200 gold watches were exported and 1,300 platinum. Pasche pointed out that because platinum watches are still relatively niche, forecasts are difficult. “I cannot predict [how platinum watches will perform going forward] because there are frequently great changes with platinum watches,” he said. “Fluctuations can be important from one period to the other. This is normal for products with small quantities.”
At Patek Philippe, the watchmaker uses platinum across its collections. Patek Philippe UK managing director Mark Hearn said: “The demand for platinum watches in the British market has remained the same for the last few years. We have seen a slight increase in platinum watches sales in the UK this year due to the growing awareness and demand for Patek Philippe generally, but this is not a really significant growth.”
Talking about the relationship between platinum and gold demand for watches, Hearn said: “In the UK, all metals are popular, although there has been a slight decrease in demand for yellow gold in recent years in the domestic market. However, we are not selling more platinum watches because of this.”
From a shop floor perspective, owner and managing director of Laing the Jeweller and Parkhouse, Michael Laing, said demand for platinum watches has been steady in 2013 but that he expects consumer interest to rise. “As the major luxury brands that work in platinum also tend to work on new production plans three years in advance it will be interesting to see if we see more platinum in Basel next year,” he said. “One obvious addition to the platinum range came this year from Rolex with the stunning platinum Daytona anniversary timepiece, which has attracted strong interest.”
For luxury watchmakers platinum watches remain niche. IWC Schaffhausen creative director Christian Knoop said: “Among all precious metals, platinum has been coveted for its unique blend of rarity, beauty, understated elegance and longevity.” He adds: “Watches in platinum are not only an important part of our collection, they truly form the pinnacle. Platinum, however, remains without doubt the material for connoisseurs. In IWC’s portfolio only the most complex and exquisite haute horlogerie watch, such as the Portuguese Sidérale Scafusia or the Ingenieur Constant-Force Tourbillon, find their way into a platinum case.”
This story first appeared in the December issue of WatchPro magazine. To read the full digital issues, click here.