RAPAPORT... Diamond exhibitors arrived at the Hong Kong International Jewellery Show, held March 5 to 9, with a certain amount of trepidation that the recent price increases would meet with stiff resistance from buyers. But their fear was quickly dispelled in the early hours of the show, as some buyers chose to grab the initiative and, after some tough bargaining, got down to buying on the first day.
The show’s opening day was on a Friday, so most of the more religious Jewish exhibitors closed their booths on Saturday, despite it being the second day of the show and one of the most important days for selling. This break benefited the nonreligious companies and the Belgian diamond pavilion was very active on Saturday.
Most of the buying took place on the third day of the show, when the diamond pavilion was again in full swing. Buyers had by then decided where they would do their purchasing.
As usual, there were mixed results reported for the show — for some, it was slow, but for others, activity was overwhelming — although most admitted it was far better than the September 2009 show. The March show is always regarded as the smaller show, but this year it grew immensely, making use of the whole of the Hong Kong Convention and Exhibition Centre.
Rearranging Pavilions
The diamond pavilion was moved from the fifth floor to the third floor for the March show and linked directly to the extension of Hall 3 in the new wing, making the connection seamless and more efficient in the use of the space available. However, there is still a mix of products in the halls, and some additional rearranging might be appropriate because both exhibitors and buyers appear to prefer halls segregated by specific product categories.
The organizers of the other annual shows reportedly also are looking into moving the diamond pavilion to the expanded Hall 3, beginning in June 2011, since everything already has been fixed for the June show in 2010. There will be no change to the September show, with diamonds continuing to be at the AsiaWorld-Expo (AWE) next to the Hong Kong International Airport.
Increased Traffic
The thing that was most noticeable at the recent show was the increased buyer traffic. The Hong Kong Trade and Development Council (HKTDC), the show’s organizer, put a lot of effort into bringing buyers to the show, and the budget for next year will be even larger. The council will be sending out more invitations to VIP buyers, offering free airfare and hotel accommodations.
While the absence of American buyers was very obvious, Asian buyers have taken up the slack and are coming in increasing numbers. In addition to Indian buyers, who have become the mainstay of the shows, there are more buyers from the surrounding countries, such as Vietnam, Indonesia, Myanmar and the Philippines. There is also an increase in buyers from the Middle East and Eastern Europe.
Buyers from Mainland China have also become regulars at all the exhibitions and now that their customers are willing to accept a wider range of qualities and colors, it has become easier for them to buy. At one time, all the buyers were looking for the same goods, so that after a few buyers bought, there was nothing left for those who followed.
Bluffing
The Chinese staple goods — in H to I, VVS — remain in very high demand, but now goods in VS and SI also are being sought. In addition, there seems to be an increasing demand for goods from 1 carat and larger in K to M, VVS to S.
Bluff goods are becoming more popular as buyers try to find goods with better discounts to give them an edge in selling. Prices for all Triple EX goods have been climbing steadily and, at the prices they are fetching, it would not be surprising if they influence an increase in future Rapaport lists.
One fact proven during the show was that, despite the higher prices, current demand for diamonds is definitely stronger. Still, surges and dips in prices are linked to the economies and sentiments of diamond buyers and the results of this show should not give diamantaires a false sense of security that the trend of increasing prices will continue indefinitely.
The Marketplace
• Demand for large sizes is still very strong. While 5-caraters are slightly weaker in the better colors, demand is strong in lower colors from J down. In goods of 8 carats and larger, the demand in high colors and clarities is stable, but supply is short.
• Demand for 3-caraters is extremely strong in virtually all colors and clarities.
• Demand for 1-carat stones is high and constant. There is a regular call for goods in the best makes, as well as in lower makes carrying bigger discounts. High colors in SI are extremely popular, as well as K-M in VS-SI.
• Demand for ½-caraters is strong in both certified and uncertified goods. While buyers prefer certified goods in lower colors and clarities, the additional cost of certifying is not justified with the prevailing prices, so uncertified goods are becoming more popular.
• Diamonds 1⁄3 and smaller are still moving well, but demand is surpassing the supply in H-I, VVS-VS. As a result, SI has become more salable.
• Small sizes are popular in both rounds and fancies, and there are supply problems only in specific sizes.
Article from the Rapaport Magazine - April 2010. To subscribe click here.