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Market Comments 4/26/2012

Apr 26, 2012 6:00 PM  
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Rough market cautious ahead of next week’s DTC sight, which is expected to be moderate at around $500 million. Rough prices appear unsustainable at current levels as polished prices have not kept up with rough price increases. Diamond manufacturers continue to suffer from poor or negative profit margins. Polished trading remains stable with rising expectations for next week’s China May Day retail season. U.N. extends rough diamond ban on Cote d'Ivoire for a year.

Global Markets

United States: Wholesale trading has slowed slightly but is stable. There is some ‎scarcity of better-quality goods in the market, making it difficult for buyers to replace sold ‎inventory. The shortages are most prevalent for fancy shape diamonds, particularly in ‎places where princess and cushion cut, 1.00-carat, F-G, VS-SI stones are in good ‎demand. Retailers are focused on pushing bridal lines ahead of the summer season with ‎center stones of under 1.00-carat being the strong sellers. ‎ 

Belgium: Polished diamond trading is stable with steady demand from the U.S. and Far ‎East markets. Confidence is being affected by the ongoing Euro-zone crisis and there is ‎some uncertainty about near-term prospects for the diamond market. Diamond ‎manufacturers perceive rough prices to be expensive relative to their finished polished ‎product and profit margins are slim. Still, rough trading is stable.‎

Trading quieted slightly as it was a short week with public holidays in Israel. ‎Further reports pertaining to an alleged black market operating in the bourse also ‎impacted confidence. However, overall trading is stable with steady demand from the ‎U.S. and Far East markets. Concerns about high rough prices are prevalent and ‎manufacturing profit margins are tight.   ‎

India: Polished trading is relatively weak as foreign and domestic buyers have restrained ‎their activities. Local buyers are cautious due to the recent volatility in the rupee-dollar ‎exchange rate and a lack of liquidity. The start of the summer vacation is also impacting ‎overall trading and manufacturing activities. There is sufficient rough supply in the ‎market, but rough trading slowed from last week as price ‎differentials have impacted ‎demand. Some activity is observed in rough goods which yield polished -11 sieve size, ‎SI- category. Trading is expected to remain subdued in the coming weeks due to the ‎summer vacation.‎

Diamond wholesale trading has improved slightly ahead of the May 1 holiday ‎weekend but remains below levels seen at this time one year ago. Consumers are ‎cautious about global economic trends and the long-term impact that the lingering ‎European crisis will have on China’s exports. There is some expectation that the coming ‎wedding season will help maintain steady diamond demand. ‎

Hong Kong:
Trading is stable ahead of China’s May Day celebrations with good demand ‎for commercial quality, lower color, VS-SI goods. Retailers are expecting an influx of ‎tourists from Mainland China in the next week and during the May Day festival to boost ‎sales. However, there remains some caution in the market and some price uncertainties ‎persist.  ‎

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