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Market Comments 4/10/2014
Apr 10, 2014 6:00 PM
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Polished markets stable but buyers are increasingly price sensitive as cutters try to raise prices due to expensive rough. Cutting center liquidity tightening due to high rough prices and GIA backlogs. Rough trading slows with premiums reduced on the secondary market. Zimbabwe plans UAE diamond embassy as Dubai sells $29M ($76/ct.) at inaugural Marange rough tender. Sotheby’s HK sells $107M (82% by lot) with brilliant-cut, 30.57ct., D, FL diamond selling for $6.5M ($214K/ct.). Hong Kong’s 2013 polished imports +9% to $18B, polished exports +6% to $12.2B. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 18 DUE TO THE JEWISH HOLIDAY OF PASSOVER.
Fancies: Fancy shape market doing better with good demand for excellent shaped and polished larger sizes. Buyers 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. 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 demand is steady. Buyers are making offers and looking for goods before the Passover and Easter holidays. The delegation of New York dealers attending the diamond week in Israel noted there is good dealer demand for Gemological Institute of America (GIA) dossiers, as well as for fancy color and fancy shaped diamonds. There is strong demand for SI-clarity goods while demand for better-quality, VVS-VS diamonds is relatively quiet. Retail jewelry demand in the U.S. is stable and foot traffic to stores is slowly picking up as the weather warms up, with ongoing strength in the bridal market.
Belgium: Local trading is relatively quiet with many dealers traveling or on vacation during the ongoing school vacation period. The polished market is stable with strong demand for GIA dossiers, particularly in 0.30-carat to 0.90-carat, VS-SI category goods. There is good demand for better-quality, large stones. Rough trading slowed since the De Beers sight as prices are high and premiums have declined on the dealer market.
Hong Kong: The polished market is relatively slow. There is a sense that buyers filled their inventory at the recent shows and are prepared to wait before making bulk orders again. There is good demand for diamonds below 1-carat, while demand for larger goods has slowed slightly. Dealers note a shortage of SI-clarity goods, as well as for 2-carat to 3-carat, D, IF diamonds.
China: Wholesale diamond trading is restrained as profit margins are being squeezed. Buyers are resisting higher seller asking prices and are not looking to make large inventory purchases. Demand is specific and focused on commercial-quality, 0.30-carat to 1.10-carat, G-J, VS-SI goods. Retail jewelry demand is stable with a continued shift toward lower price point items, and rising interest in fancy shaped diamonds.
India: Polished trading has slowed with fewer foreign buyers in Mumbai looking for goods, and continued caution among local buyers. There is stable demand for 0.18-carat to 0.50-carat diamonds, while the backlog of goods being certified at the GIA has caused shortages in the market. Liquidity among manufacturers has been squeezed by recent rough price increases and by prolonged manufacturing processes due to GIA delays. Dealers expect April and May will be a slower period than experienced in the first quarter of the year. There is good demand for 0.50-carat, D-J, VS1-SI1 diamonds. Demand for fancy shapes is steady but shortages prevail as manufacturers are focused on cutting rounds in lieu of fancies. Rough trading has slowed and manufacturing levels are expected to reduce during the upcoming summer vacation period.
Israel: Market sentiment was positive during the U.S. and International Diamond Week that took place in the bourse on April 6 to 10. The event brought a lot of people to the trading floor but sales were not booming. There were many fancy color diamonds on offer. There is good demand for fancy shapes but there are shortages in the market due to the current focus on manufacturing rounds. Trading is expected to slow as many businesses will close in the coming week for the Passover holiday.
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