Metal suffered "anaemic" consumer demand in 2012.
The latest Johnson Matthey platinum group metals (PGM) report released this week has revealed a tumultuous market for palladium with gross demand falling by 60,000 ounces in 2012, while European demand was up.
Gross demand for the metal’s use in jewellery design fell to 445,000 ounces in 2012, some 60,000 ounces less than 2011’s figure, with demand in China – the world’s leading global jewellery manufacturing nation – falling for the fourth consecutive year.
In Europe, however, the story was a little rosier for palladium, with demand up by 5,000 ounces to a total 65,000 ounces, with UK demand focused on the manufacture of men’s palladium wedding rings.
Johnson Matthey described UK hallmarking for British-made palladium jewellery as "soaring" in 2012, growing 14.3%. There was also increased demand and hallmarking for palladium 500 products, an alloy that has 50% of the palladium content of the standard Pd950 alloy.
According to the report, "anaemic consumer demand" for palladium has led to a large number of Chinese manufacturers and even retailers opting to cease working with or selling palladium jewellery, despite the relatively high margins that the metal offers.
Of note is a lack of sustained marketing for palladium jewellery, something that has affected US sales of the metal, as well as its public perception. A marketing promotion was launched for palladium in the US in 2011 but this is said to have had limited success to date. As a result the metal is reportedly being bracketed alongside non-precious jewellery and wedding bands made in stainless steel and titanium.
The amount of scrapped and recycled palladium jewellery fell by 190,000 ounces in 2012, net demand reached 255,000 ounces compared with the 295,000 ounces recorded in 2011.
To read Johnson Matthey’s platinum report figures for 2012, click here.