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Israel
By Avi Krawitz
All eyes were on the rough diamond market in February as strong seasonal demand supported higher prices in the trade. Nissim Zuaretez, chief executive officer (CEO) of D.N. Diamonds, a specialist supplier of large polished diamonds above 2 carats, observed that the industry began 2014 on a positive note with an improvement in both rough and polished trading. He contended that there is still room to profit from rough purchases at the moment, given that polished prices have strengthened. “The demand is there, especially in large sizes of 3 carats and up, which are very strong at the moment,” Zuaretez said. “There are not a lot of nice stones in the larger goods so what you find you can sell at good prices.” Others argued that the rough market may be showing familiar patterns of overextending itself and not reflecting real trends in the polished. One rough broker, who requested anonymity, described the market as being “wild” in January and February and questioned whether manufacturers would be able to profit from the rough at such high current prices. “There is polished demand but I’m not convinced polished prices will rise to the same extent in three months’ time when the current rough is processed and comes to market,” he said.
Simultaneously, polished dealers were frustrated by the backlog of goods being graded at the Gemological Institute of America (GIA), stressing that the delays were harming their business because it is taking twice as long to process their goods. However, the delays have not tamed local dealers’ rough demand. To capitalize on the strong rough market, the Israel Diamond Exchange (IDE) is hosting the inaugural International Rough Diamond Week in the bourse from March 9 to 13, which will include tenders and viewings by ALROSA, De Beers, Rio Tinto, I. Hennig/Fusion Alternatives and Tzoffey’s. Avner Sofiov, Tzoffey’s president, reported that the company’s tender was already overbooked several weeks prior to the event, which prompted IDE to allocate additional viewing rooms on the final day “to meet the overwhelming demand.” Organizers added that more than 300 people had registered for the rough diamond week, bringing it close to being fully booked.
Most of the focus in the bourse, however, pointed toward the Hong Kong March show because a large delegation of Israeli companies is again traveling to the event. Zuaretez, whose company opened an office in Hong Kong in 2013, said he expects the positive momentum to continue through the first quarter as the market tends to operate in cycles. He explained that post-holiday season demand is driven by the cycle of trade shows, beginning in March with Hong Kong, followed by BaselWorld, which opens in late March, and JCK Las Vegas, which opens in late May. As part of that sequence, and in addition to the rough diamond week taking place in March, IDE has scheduled the biannual U.S. and International Diamond Week in Israel from April 6 to 10. The event is projected to feature more than $1 billion of polished diamonds and hundreds of participating companies, IDE reported. Shmuel Schnitzer, IDE’s president, stressed that these events have helped revitalize the role of the bourse in stimulating trading. “By bringing IDE members back to the trading floor, we’re creating a level playing field for all participants. No matter if you are the owner of a multinational diamond firm or a single operator, all IDE members are allocated the same space at the tables on the floor,” he said. “This, in my view, offers the same measure of added value to all participating members. Of course, the fact that many hundreds of buyers are visiting our bourse for the U.S. and International Diamond Week constitutes important added value to our entire diamond business community.”
As dealers gained confidence in the market, some of their concerns about synthetic diamonds being mixed in parcels of natural stones were also eased. The Gemological Institute of America (GIA) delievered to the bourse two of its DiamondCheck machines for use in detecting synthetic diamonds (see Weeding Out Synthetics in the Industry section). Yoram Dvash, chairman of the IDE’s Industry Committee, encouraged IDE members to take advantage of the machines, which are available for use in the technology wing of the exchange. He said that the entry of undisclosed synthetic goods to the legitimate trade is one of the sternest challenges facing the industry and that the industry needs to use all possible means to combat this practice. In addition to presenting the bourse with the machines, GIA hosted a seminar about synthetic diamonds for IDE members.Article from the Rapaport Magazine - March 2014. To subscribe click here.
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