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Market Comments 9/18/2014
Sep 18, 2014 6:00 PM
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Sharp improvement in market sentiment as HK show exceeds low expectations. Strong visitor traffic but sales not booming due to stiff buyer price resistance. Sellers that reduce prices are selling with some manufacturers lowering prices to generate cash flow as Indian liquidity is tight. Steady demand for G-J, VS-SI goods, high-end, D-F, VVS+ very weak. Chinese jewelry demand stable ahead of October 1 Golden Week. De Beers says global diamond jewelry demand +3% to $79B in 2013. Hong Kong 1H polished imports +9% to $9.7B, polished exports +17% to $6.8B. India Aug. polished exports -19% to $1.9B, rough imports +27% to $864M. Petra Diamonds sells 122.52ct. blue rough stone for $28M ($225K/ct.).
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 demand remains stable in the U.S. with retail jewelers starting to prepare their inventory for the holiday season. New York dealers are eyeing this week’s Hong Kong Jewellery and Gem Fair to assess whether there are any significant changes to price and demand trends among global diamond traders. Overall, loose polished trading is steady with good demand for commercial-quality, G-J, SI-I3 diamonds. At the retail level, jewelry sales are stable with a strong emphasis on engagement and bridal lines.
Belgium: Trading in Antwerp is slow with many dealers at the Hong Kong show hoping the event will give the market a boost from the quiet that has lingered since the August break. There is good demand for rounds below 1-carat, while demand is weak for D-F color diamonds. There is good demand for non-graded pointer sizes sold in parcels and for non-graded, 1-carat and larger goods. Rough trading is relatively quiet and prices continue to soften on the secondary market.
Hong Kong: The focus of the diamond trade was on Hong Kong this week during the September show. Trading was stable in the diamond hall although prices softened slightly. Strong traffic demonstrated healthy Far East demand for diamonds and diamond jewelry ahead of the holiday season, which stretches from the October 1 National Day Golden Week to the Chinese New Year on February 19. There is good demand for commercial-quality, GIA dossiers, G-J, VS-SI, while demand for goods above 2 carats has softened. Demand for the very high-end diamonds is weak. Overall, the show helped boost sentiment in the trade although buyers remain relatively uncertain about prices.
India: Trading in Mumbai is sluggish as many suppliers were at the Hong Kong show with a lot of goods. As a result of the show, there were very few foreign buyers looking for goods in Mumbai this week. Domestic demand is stable as retail jewelers begin preparing for the Diwali season that begins on October 23. Some Indian buyers traveled to Hong Kong looking for larger stones but generally offered prices that were too low to close the deal. There is steady demand for melee and for 0.30-carat to 0.99-carat, G-K, VS-SI goods. Liquidity remains tight among manufacturers and some have lowered prices to generate cash flow. Jewelry retail sales are seasonally slow but are expected to improve during next week’s nine-day Navratri festival, which is considered an auspicious period to buy gifts.
Israel: Activity in the Israel Diamond Exchange has been quiet as a large delegation of suppliers traveled to the Hong Kong show. Israeli exhibitors were satisfied with the level of trading at the show, even if the sales volume was not booming. The show was better than expected and dealers expect the momentum to continue back in Israel. Suppliers of niche items such as nice-make fancy shapes and fancy-colored diamonds had a good show as prices for these goods held steady.
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