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Market Comments 8/20/2015
Aug 20, 2015 6:00 PM
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U.S. demand
supporting the market with great opportunities for cash buyers. Chinese
consumer diamond demand plunges as Shanghai stock market drops 8% this week.
Low expectations for September Hong Kong show. Indian domestic market cautious
as the rupee falls below 65/$1. De Beers sightholders hoping for sharp rough price
cut. Gem Diamonds 1H sales -21% to $118M, profit -24% to $26M. Belgium’s July
polished exports -13% to $1.2B, rough imports -36% to $779M. Swiss watch
exports -9% to $2B with exports to Hong Kong -29% to $278M. Reuven Kaufman
re-elected NY DDC president.
Fancies: Demand soft. Pears, Ovals and Cushions
steady, Princess, Hearts slow. Prices for curves improving slightly. U.S.
demand supporting market for commercial-quality fancies, especially for sizes
under 1-carat. Far East fancy demand weak. Buyers are very selective and
insisting on excellent-shape proportions. Significant price differentials
between excellent- and average-cut fancies. Off-make, poorly-cut fancies
illiquid and very hard to sell, even at very deep discounts.
United States: Polished trading is stable. Buyers are looking for opportunities as suppliers’ inventory levels remain high. There are shortages of certain categories. There is some anticipation of good buying opportunities during India Diamond Week from August 24 to 27 at the Diamond Dealer’s Club of New York. The following week, dealers will be traveling to Israel’s International Diamond Week. There is steady demand for 1-carat to 3-carat, F-I, VS-SI, triple EX diamonds. Retail jewelry sales are stable with jewelers focused on bridal lines during the ongoing summer wedding season. There is some retailer concern about finding the right goods to suit their preferred designs as very few fresh goods are coming to the market since manufacturers have reduced their polished production.
Belgium: Antwerp’s diamond district remains very quiet and likely to continue so until operations resume on Monday, August 24 after the summer break. Rough dealers are eyeing next week’s De Beers sight with cautious sentiment on the rough secondary market. While supply is expected to be low, some also anticipate a drop in prices. Others believe that De Beers recent adoption of a more-flexible deferral policy signals that the company will maintain price levels. Polished trading is projected to remain relatively quiet at least until the September 16-22 Hong Kong Jewellery and Gem Fair.
Hong Kong: Sentiment is weak in the Far East with China’s recent stock market and currency declines weighing on dealer and consumer confidence. Polished trading is stable as dealers are gearing toward the upcoming Hong Kong show with steady demand for 1-carat to 3-carat, G-H, VS-SI, triple EX diamonds. Jewelry retailers note that sales have been hit by the drop in tourist traffic from Mainland China. Many have increased their promotions and discounting activity in an effort to reduce inventory.
India: The polished market is quiet with steady U.S. demand compensating for weak Far East and domestic trading. The depreciation of the rupee to above INR 65 per U.S. dollar has added caution to the local diamond market. Demand is sluggish for 0.30-carat to 0.50-carat, H-K, SI diamonds as there are a lot of goods in this category in the market. There is steady demand for 1-carat to 1.50-carat, D-H, VS-SI, triple EX diamonds. Manufacturing has shifted from dossiers to 1-carat and larger goods to satisfy these market trends. Still, manufacturers are maintaining low production levels at their factories and are hoping profitability will improve if rough prices soften and polished trading firms in the coming weeks or months. At retail, gold jewelry sales have picked up as gold prices dropped, raising expectations for the Diwali and subsequent wedding season.
Israel: Activity in the bourse is relatively quiet and there’s still a feeling that dealers took extended vacations while the market is slow. Some expect more buyers in Ramat Gan from next week or at least during the International Diamond Week which starts on August 30. There is steady U.S. demand for commercial-quality SI and pique quality diamonds. There is stable demand for 1-carat to 3-carat, D-H, VS-SI, triple EX diamonds.
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