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Market Comments 5/21/2015
May 21, 2015 6:00 PM
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All eyes on Vegas with rising expectations for JCK Show. Far East demand weak. Polished shortages supporting prices and improving dealer demand as Indian factories close for summer vacation. Rough stable even though cutting center profit remains problematic. Letšeng Jan.-May sales -9% to $77.1M, average price -21% to $2,146/ct. Asian Star 4Q sales -12% to $138M, profit -1% to $4M. India April polished exports -11% to $1.6B, rough imports -31% to $1.4B. Belgium April polished exports +1% to $1B, rough imports -32% to $907M. Hong Kong 1Q polished imports -2% to $4.8B, polished exports -1% to $3.5B. Rapaport Vegas Breakfast, Sunday May 31, 8-10 a.m.; register diamonds.net/jck.
Fancies: Ovals hot, Cushions steady, Pears and Princess improving, Hearts slow. Prices for curves improving slightly. U.S. demand supporting market for commercial-quality fancies, especially for sizes under the carat. Larger sizes softening. 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.
Global Comments
United States: Sentiment has improved in New York’s diamond district but trading remains relatively slow. Activity is geared toward preparing for the various Las Vegas shows taking place next week and most diamantaires have positive expectations for the shows. Buyers are less selective than before as there is a shortage of goods in the market. There is steady demand for below 1-carat, G-J, SI-I2 diamonds. Some dealers have been cautious following the recent recall by the Gemological Institute of America (GIA) of goods treated to temporarily improve their color. While recent government reports indicate relatively weak U.S. jewelry sales, retailers note steady sales in their engagement ring and bridal lines.
Belgium: Trading has slowed slightly as buyers are pushing for lower prices but suppliers are holding firm. There is steady demand for 1-carat, D-G, VVS, triple EX goods. There is a shortage of nice goods in the market and dealers note that they have lowered their expectations on the quality of available supply. There is good demand for 0.50-carat to 1-carat, G-J, VS-SI diamonds, while trading in large diamonds above 3 carats is relatively weak and there are a lot of these goods on the market. Demand for fancy shapes is relatively weak.
Hong Kong: Polished trading remains slow with relatively weak local demand. Jewelry retailers note that tourist traffic from Mainland China has dropped, which has affected sales. Store rentals in the city have been lowered as general retail is slow amid weak economic sentiment for the year ahead. Diamond dealers report steady demand for 0.50-carat to 0.60-carat, F-G, VVS2, triple EX goods. In general, there is good demand for nice-make triple EX diamonds, which are in short supply.
India: Polished trading in Mumbai is stable but relatively quiet as many diamantaires are on summer vacation. Dealers have positive expectations for the upcoming Las Vegas shows and hope they will signal a strong U.S. market for the rest of the year. There is steady U.S. demand for piqué goods, while Far East demand remains cautious. There is good demand for parcels of 0.20-carat to 0.50-carat, SI diamonds. There is stable demand for 1-carat, I-K, SI-I2 diamonds, while demand is relatively weak for large stones above 3 carats. In fancy shapes, there is good demand for pears, VS-SI, and steady demand for marquise, princess and oval shapes below 1-carat, SI and lower clarities. Rough trading has stabilized as prices have gradually softened. However, manufacturers are maintaining lower production levels through the ongoing vacation period until the end of May.
Israel: Sentiment has improved as dealers hope the Las Vegas shows will stimulate stronger activity in the trading centers. There has been steady U.S. demand, while Far East demand remains weak. Dealers are concerned that the discovery by the GIA Israel lab of goods that were treated to temporarily improve their color will have wider implications. Trading confidence has been slightly affected and many are waiting to see how the issue will be resolved by the police and bourse investigations. There is good demand for 0.20-carat to 0.40-carat, H-J, SI-I diamonds, as well as for 0.30-carat to 0.99-carat, D-H, IF and VS diamonds. Demand is relatively weak for diamonds above 3 carats. In fancy shapes, there is good demand for pears and ovals, and improving demand for emerald dossiers, F-H, VVS-VS.
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