|
|
Market Comments 7/19/2012
Jul 19, 2012 6:00 PM
|
|
|
Trading centers quieter than usual ahead of summer vacations in Belgium and Israel. Buyers avoiding large purchases while suppliers adjusting to lower prices. De Beers drops prices average of 3% but sightholders continue to reject non-profitable DTC goods. July DTC sight estimated at $420M before rejections. Harry Winston estimates rough prices -8% in 2Q. Rio Tinto 2Q diamond production +3% to 2.8M Cts. BHP Billiton FY4Q production -28% to 413K Cts. Chow Tai Fook 1Q revenue +16%, same-store sales +4% reflecting cautious Far East demand. Birks & Mayors 1Q sales -3% to $69M. India’s June polished diamond exports fall 35% to $1.5B, rough imports -26% to $1.2B.
Fancies: Complaints about reductions of Rapaport Pear Shape Price List on July 5. Dealers feel fancy shape market is strong with shortages of desirable goods and that prices should not have been lowered. Significant price differentials between fine and average-cut fancy shapes. Fine cut stones may not be available as suppliers tighten discounts and resist lower prices. Trade comments are invited to prices@diamonds.net.
Global Markets
United States: Polished diamond demand is expected to remain slow in the coming weeks with many dealers on vacation in July. Some buyers are traveling to the manufacturing centers to look for goods as they expect suppliers to come under pressure and lower their prices. There is steady demand for lower quality, commercial SI clarity stones, but retailers are keeping their inventories low for now. Retailers continue to be selective in their buying, while sales continue to be driven by bridal lines.
Belgium: Polished trading is quiet as dealers are gearing for their August vacation period. Buyers are focused on filling specific orders with VS-SI stones in stronger demand than other categories. Rough trading is slow but stable after prices on the secondary market have softened. However, manufacturing profit margins remain tight as primary rough supply continues to be expensive relative to the resulting polished.
Israel: Trading is quiet as is expected in July. However, many note that the market is quieter than usual as dealers are concerned that prices will further soften in the coming weeks. Suppliers are selling rounds at the new, lower prices with more foreign buyers looking for bargains in the bourse. There is relatively steady demand for dossier and 1 carat certified, VS-SI, clean cut goods. Rough trading is weak. While prices have declined on the secondary market, manufacturing profits are tight as the primary supply remains expensive.
India: Rough and polished trading is weak as buyers are cautious due to price uncertainties. Demand for better quality polished goods is particularly soft and suppliers are willing to adjust prices for these items. They are holding firmer prices for SI and lower clarity goods due to relatively better demand for these categories. The absence of overseas buyers, along with tight liquidity and exchange rate volatility, continues to impact market sentiment. Rough demand is weak as dealers are cautious and trading remains subdued. Rough inventories have increased as manufacturing continues at levels below capacity and polished trading is weak.
China: Wholesale trading remained relatively quiet through July, as it was in June, as buyers are still exerting the same caution. While trading volume is down from 2011 levels, demand continues to be focused on certified 0.30-carat to 1.10-carat, D-H, VS-SI goods. Retailers are sourcing what they need and are avoiding making larger inventory purchases even though prices have decreased. Consumer confidence has softened due to global economic uncertainty and a decline in local exports and manufacturing.
Hong Kong: Polished trading has slowed as dealers are increasingly concerned about market conditions. Buyers have taken the recent softening of prices as a signal that further declines may be imminent and are holding back from buying. Consumer demand from China has also declined in the past month. Trading is expected to continue to be relatively slow until mid-August when dealers start to plan for the December Hong Kong show.
|
|
|
|
|
|
|
|
|
|
Tags:
|
|
|
|
|
|
|
|
|
|
|