Dealers remained optimistic in March, as they had been since
the start of the year. However, after a buoyant January and February, the
industry saw a month of stability, rather than any further boost in sentiment.
The plateau followed a period in which Asian demand went up
significantly, with the region producing notable sales increases for retailers.
Tiffany & Co.’s Asia Pacific revenue rose 13% in the fourth fiscal quarter,
which ended January 31, while China’s total retail sales of gold, silver and
jewelry grew 3% in the first two months of 2018. That said, US consumer
confidence for March reached its highest level since 2004, according to the
University of Michigan.
“Sales of diamond jewelry went very well in the Christmas
holiday season in the US,” Yuri Okoyomov, deputy CEO for sales at Alrosa, said
in an investor call on March 16. “Also, the Chinese New Year holiday season
demonstrated sales that [were] stronger than expected.”
The price is right
Polished demand only saw small changes: The RapNet Diamond
Index (RAPI™) for 1-carat diamonds slipped 0.1% between March 1 and press time
on March 25. RAPI for 0.30-carat stones climbed 0.3%, while the index for
0.50-carat diamonds increased 0.7% and 3-carat stones declined 0.4%.
The rough-diamond market reflected this pattern of stability
following the sharp improvement at the beginning of the year. Alrosa’s
rough-price index showed a “moderate” rise in January and February due to
post-holiday restocking, but the miner expects it to stay flat for the rest of
2018, Okoyomov noted. De Beers raised prices at its February sight, which ran
until March 2. Demand was strong for 1- to 2-carat rough diamonds — stones that
yield 0.30- to 1-carat polished — dealers told
Rapaport Magazine at the recent
Hong Kong International Diamond, Gem & Pearl Show.
‘An encouraging start’
Mountain Province also made the most of strong buyer
interest in the first quarter, holding back high-value production from the end
of last year to sell at its March tender. That decision, combined with bringing
forward other expensive stones that it would normally have offered at its next
sale, helped the miner achieve its higher average price to date.
“This strong performance reflects an encouraging start to the
year for rough diamonds across all categories, as well as the quality of the
fancies and specials on offer,” said David Whittle, Mountain Province’s interim
CEO.
However, the March Hong Kong show did not live up to
dealers’ high expectations, as the event’s timing — just after Chinese New Year
— meant many clients were still on vacation. Even so, Asian market sentiment
was strong, dealers noted.
The pieces appear to be in place for a steady year of growth
in the global diamond market.
Article from the Rapaport Magazine - April 2018. To subscribe click here.