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Israel
By Avi Krawitz
Israeli diamond dealers returned from the Hong Kong show satisfied with the volume of business done at the trade event. The show was better than expected for many, even as buyers pushed for higher discounts and suppliers had to compromise on price to get the deal done. “The show beat expectations, but prices were a bit weak,” said Motti Amit, a manager at polished-diamond supplier Leo Schachter. “Prices softened a bit as the show gave suppliers a chance to clear stock. We’re now seeing less availability in some goods.” Israeli exhibitors, many who were also looking to buy goods at the show, noted there were a lot of less desirable, imperfect goods available, while new, better-quality diamonds — Triple EX with no fluorescence — were still coming through production.
There is good demand in the Asia-Pacific region but Chinese buyers came with certain expectations regarding prices, reported a supplier of high-end fancy-shape diamonds who requested to remain anonymous. Buyers recognize that polished prices have been softening for some time and they expect the trend to continue by pushing discounts higher, he added. Israeli suppliers who were willing to compromise on price sold a steady volume of round — .70-carats to 2.99-carats, D to K color, VS1- to SI1-clarity diamonds. They noted that trading in these goods was driven by dealer demand rather than Chinese retail consumption, with many Indians looking for goods at the show they would otherwise source in the trading centers. Still, Israeli dealers reported that the Chinese are buying again. “The show was not like three or four years ago, but it was certainly an improvement from last year,” Yoram Dvash, president of the Israel Diamond Exchange (IDE) told the Israel Diamond website. “In contrast to previous shows, which were marked by large numbers of buyers from India, we saw an impressive number of Chinese buyers this year, as well as buyers from additional Far East countries.”
Amit noted there was a shift in demand to lower price points as Chinese buyers were looking for I, J and K colors in the parcel goods he was supplying. The latter goods are difficult to supply because there’s less rough available in those lower colors, Amit explained. “Therefore, you’re selling a smaller portion of your stock,” he said. Jeremy Medding, owner of EMA Diamonds, which supplies round diamonds up to 10 carats, added there was good demand for SI-clarity diamonds while Asia Pacific was traditionally a strong market for VVS-clarity to VS-clarity diamonds. For larger goods, buyers were more selective at the show and were prepared to wait for what they wanted. In general, buyers were careful not to get stuck with too much inventory the way they have in the past, influencing them to purchase more selectively, Medding added. Despite that selective buying, dealers were not too concerned that the large volume of new production coming on stream would leave them with too much stock in the short term. Most expected that the positive momentum from the show will continue for the next two to three months.
While the show raised sentiment in the market, Israeli diamantaires said they’re relying less on the show model to boost sales as they also evaluate it against the expense of attending the many shows that take place during the year. “The show model has passed its peak in terms of generating new business and excitement,” Medding said. “Apart from the expense of your booth and staff flights and accommodation, there’s also a sizable inventory cost, as your goods are in transit for nearly two weeks around the event, and not available in other centers.” With the Baselworld show taking place toward the end of March after press time, one or two companies who regularly exhibit there said they canceled their attendance this year. High-end suppliers noted some improvement in demand for large stones in the two weeks between Hong Kong and Basel, while demand for rare fancy color diamonds remains strong.Article from the Rapaport Magazine - April 2017. To subscribe click here.
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