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Market Comments 10/15/2014
Oct 15, 2014 5:00 PM
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Polished centers quiet over Jewish holidays with sluggish Indian demand ahead of important Diwali holiday season. Buyer's market prevails as suppliers face tight liquidity. De Beers Oct. sight estimated at $460M; few extra goods (ex-plan) sold with more refusals and deferrals. Rough secondary market weak amid concerns of post-Diwali oversupply. Bankers are tightening up the diamond trade. Belgium Sept. polished exports +15% to $1.6B; rough imports +28% to $1.3B. Mixed outlook for U.S. Christmas with National Retail Federation expecting total sales +4% to $620B; but PwC foresees average spending -7% to $684 as households have less to spend. Signet appoints Mark Light as CEO following Michael Barnes resignation. Best wishes for a happy and enlightened Diwali to all our Indian friends. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED OCT. 17 DUE TO JEWISH HOLIDAY OF SUCCOT.
Fancies: Fancy shape market steady with fair demand for excellent shaped and larger polished sizes. Cutters are moving to fancy shapes because of significantly high rough prices for identical-quality round diamonds. Curves (Pears, Ovals) are doing better than Squares (Emerald, Princess) in larger sizes with squares doing better in under the carat sizes. Demand for Princess cut weak. Far East markets becoming more aware of fancy shapes. Buyers very selective regarding shape- and cut-quality with extreme price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and hard to sell even at very deep discounts.
Global Comments
United States: Polished diamond trading in New York has been relatively quiet and the market has softened in the past two weeks. Suppliers have been willing to lower prices to shore up liquidity. Simultaneously, there are many buyers looking for goods for the U.S. market. U.S. buyers have had a presence in India looking for deals as they build up inventory ahead of the Christmas shopping season. Buyers sense that global suppliers are under pressure and are pushing for higher discounts. New York trading is expected to continue to be quiet in the coming two weeks during the Succot Jewish holiday. Retail jewelry sales are stable despite a slight decline in consumer confidence reported in September.
Belgium: Market sentiment is mixed following the Hong Kong show. Some are satisfied with the level of trading taking place but there are underlying concerns that prices have softened and that liquidity remains tight. The recently announced decision to close Antwerp Diamond Bank has brought further caution that overall bank credit to the industry is declining. There is steady demand for Gemological Institute of America (GIA) dossiers although demand for 0.30-carat and 0.40-carat goods has slowed. Rough trading remains quiet on the secondary market ahead of next week’s De Beers sight.
Hong Kong: Sentiment remains relatively positive following the September show, as buyers were able to close deals albeit at lower prices. However, post-show trading has been affected by National Day celebrations this past week. While the official holiday occurred on Wednesday and Thursday, many wholesale businesses closed for the entire week. Furthermore, political protests by the Occupy Central movement has disrupted business activity with demonstrations shutting down major traffic arteries. The demonstrations have also affected retail sales in the city, with many jewelers closing stores, while tourist numbers from Mainland China are significantly down during Golden Week.
India: Polished trading has slowed as demand softened since the Hong Kong show. There are a lot of goods on the market as suppliers are getting more goods back from the GIA. Suppliers are also facing liquidity issues, which has led buyers to push for higher discounts. Demand for 0.30-carat to 0.49-carat diamonds has slowed, particularly for better quality VVS-VS goods. There is steady U.S. demand for SI2 and lower-clarity diamonds. Domestic demand remains weak, with suppliers resisting memo and credit sales to local jewelers. Manufacturers have increased their factory output in order to have polished ready before the Diwali break that begins on October 23. The rough market is relatively quiet.
Israel: Trading in the Israel Diamond Exchange is fairly quiet, although the mood is positive following the Hong Kong show. There is demand and suppliers are able to sell if they have the right goods at the right price. Dealers are looking for goods to supply to the U.S. during the upcoming holiday season. Many are waiting for the end of the Jewish holiday season to make buying trips and subsequent sales trips.
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