May was notable for continued improvement in sales and in diamantaires’ confidence. “Business in general certainly has picked up,” according to David Goldstein, president of Goldstein Diamonds in Scottsdale, Arizona. “It looks like those who have money are starting to let go of it,” observed Ami Koret, vice president of Davidoff Diamond Corp. in Houston, Texas.
Atit Mehta, vice president of Atit Diamond Corporation in New York City, explained, “We see demand from across the U.S. I don’t think that this is because the retailers are seeing more demand, but because they didn’t buy all last year.”
Rap List Increases
On May 7, prices on the Rapaport price list increased for diamonds weighing more than 0.90 carats. Wholesalers who spoke with RDR felt the changes were appropriate. Jay Moskovitz, vice president of Robert Moskovitz Co. in New York City, declared, “I think it’s good. Let it go up. It’s a sign of business picking up. The higher-end stuff has been going up in price. We have been dealing with a lot of the cheaper-end goods, which have been picking up for us. So it doesn’t affect us as much. But let it go up.”
Goldstein remarked, “I think any retailers who had business on memo called to say ‘I’ll buy it,’ so I’m more of a realist who says, ‘Great, it spurred sales.’ I would shake at the thought of another increase, but I think it sent a message that we’re not dead. I think it renewed confidence for the dealer.”
Smaller Stones Strong
“I knew that price list had to increase at some time,” Atit Mehta acknowledged. “I feel that the sizes below 0.90 carats should go up as well. Stones have been trading at ten back, so it has been a pretty hefty jump up. I think whenever the price list needs to change, it needs to change before the JCK Las Vegas show.”
Koret commented, “I think it was the right thing to do. Polished is still not high enough compared with the rough. From what I understand, it still has a long way to go before it gets where it has to be. The cutters are afraid to buy because they can’t sell the polished without losing money. The G to F colors in 0.75 carats need to come up in price as well. As long as it is done gradually, it is okay. In 2008, it was too much, too fast.”
Shakeel Japanwala, manager of the certified diamond division at C.D. Diam in New York City, believes that the move hurt sales. “The market is disturbed now. It really softened the market,” he contended.
The mid-April ash cloud from Iceland’s volcanic eruption disrupted some transactions. “We had to wait for shipments from India. We lost a couple of sales from customers who could not wait. For around ten days, we had problems,” Japanwala reported.
However, most players who were impacted were able to cope. “I think people were very understanding,” noted Atit Mehta. Koret said one of his shipments ended up in Israel amid the confusion. “What can you do? It’s a force of nature,” he reasoned.
Sunday, May 9, was Mother’s Day, but the holiday did not spur sales on its own. “I don’t think we saw a lot of action for Mother’s Day,” Goldstein stated. Koret indicated the same. “From what we hear, Mother’s Day has no effect on sales.”
Global Economic Jitters
Though the most recent U.S. stock market turmoil and Greece’s economic woes didn’t seem to harm diamantaires directly, Atit Mehta felt a subtle change in mood. “The sentiment that the economy was getting better kind of got hindered. This may have something to do with why gold is so high right now. People are a little bit scared again. People do think that the recovery is here, but they think it may have come a little too quickly.” Yet he noted that he did not see the makings of “a continuous downward trend.”
Overall, U.S. diamantaires are optimistic. “If there was ever a silver lining in this debacle of the economy, it is clearly the credit,” said Goldstein. “It’s now much more acceptable to say, ‘No, I want to get paid or I want collateral,’ and ‘If it is sold, I want to get paid on Friday.’ We really got together and told the retailers they have to pay. The wholesalers, by tightening the credit, have allowed this business to continue to operate.”
In the future, “I think the business will continue to stay okay, with moderate increases, and 2011 might be a moderate decline,” Goldstein predicted. Moskovitz concluded, “I think there are better days ahead for us. People are starting to feel good.”
The Marketplace
• Diamonds ranging in price from $800 to $1,500 per carat wholesale are increasingly difficult to find, as well as 0.50-carat promotional stones below $600. As a result, prices on these items are increasing.
• Rounds and princesses in D to J colors and SI2 to I2 clarities are selling briskly.
• 3-carat diamonds are meeting strong demand in all colors and clarities.
• There is a fair amount of interest in 6-carat to 8-carat diamonds in I to J colors and SI1 clarities.
• Cushions and radiants continue to attract buyers, which is impacting princess demand.
• Requests for Asschers have come to a halt, while sales of emerald cuts are fairly weak.
Article from the Rapaport Magazine - June 2010. To subscribe click here.