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Market Comments 4/12/2012
Apr 12, 2012 1:00 PM
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Diamond trading quiet over Passover and Easter holidays. Indian jewelers suspend strike on govt. commitment to review proposed gold and jewelry tax. Liquidity remains tight. ALROSA FY sales +28% to $4.5B, net profit more than doubles to $1B; 1Q 2012 sales +5% to $1B, net profit +23% to $282M. Belgium’s March polished exports +6% to $1.4B, rough imports +7% to $1.4B. U.S. Feb. polished imports -8% to $1.5B, polished exports +5% to $1.6B. Japan’s Feb. polished imports +40% to $70M. GFMS/Reuters survey predicts gold to surge above $2,000/oz. in 2012. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED APR. 13 DUE TO PASSOVER HOLIDAY.
Global Markets
United States: Wholesale polished diamond trading slowed slightly but prices are still firm. There is rising demand for square fancy shapes, particularly cushion, princess and emerald-cut stones. In general, demand is focused on 0.90-carat to 2.00-carat, G-H, SI1 category polished. While consumer confidence is still relatively high compared to a year ago, the volume of sales at retail remains subdued. There is growing expectation that the summer wedding season will provide an extra push for bridal jewelry.
Belgium: Polished trading has slowed slightly in the past week but remains relatively stable. Buying is cautious and those that are buying for inventory are doing so on a small scale. Rough trading is stable with premiums on the secondary market holding steady since the Diamond Trading Company (DTC) March sight, despite dealer complaints of high prices.
Israel: Business activity has slowed ahead of the Passover festival, which begins on Friday. While the bourse is still officially open during the seven-day holiday, many businesses are planning to close in the coming week. There is good demand for 0.30-carat to 1.99-carat, G-J, VS2-SI1 stones. There is continued improvement in demand for fancy shape polished. Rough trading is stable.
India: Local polished trading remains weak as the strike by Indian jewelers to protest the proposed excise duty on jewelry has affected buying. The one-day suspension of trading in Surat and Mumbai in support of the retail strike also impacted overall trading in the diamond market. Liquidity is tight as a result of the stalled retail activity. There are few foreign buyers in the market but they are restricting their purchases to fill current orders. There is good demand for VS-SI and piqué stones but these goods are available only at a certain price leading to some resistance from buyers. Buyers are also watchful due to volatility in the rupee-dollar exchange rate. Rough trading remains steady, with better activity for rough yielding polished of -11 sieve size, SI categories. There is sufficient rough supply in the market as cutting activity remains below capacity.
China: Wholesale businesses were closed during this past week’s solemn Qingming (Tomb Sweeping) festival and retail activity was subdued. In general, wholesale and retail trading is stable with some rising demand for 1.00-carat diamonds. While some retailers are starting to build inventory again, most buyers remain cautious and significant price differences exist with suppliers.
Hong Kong: Polished trading is stable even though substantial price differences exist between dealers. There is good demand for dossier certificates for goods around 0.50 carats and buyers are increasingly opting for SI clarity stones. There are high expectations among retailers for the upcoming summer wedding season as many couples consider it lucky to marry during the Year of the Dragon.
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