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Market Comments 12/13/2012
Dec 13, 2012 6:00 PM
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Polished markets stable with very good U.S. demand for SI qualities. Jewelers discounting heavily to drive final Christmas sales. Expensive De Beers sight estimated at $490M. Weak rough trading and low premiums as Indian cutters hold enough inventory for post-Diwali manufacturing. Christie’s NY sale at $32.5M (84% by lot) with rectangular-cut, 50.01ct, D, potential FL diamond selling for $8.4M ($167,400/ct.). U.S. Oct. polished imports -21% to $1.4B. Belgium’s Nov. polished exports -8% to $1.2B. Philippe Mellier, Varda Shine to address DMIA NY meeting. Caution: Prices for green, grey and brown tinted diamonds 10-15% below non-tinted. Green tint often indicates Marange origin.
Fancies: Fancy market relatively steady with good U.S. demand. Smaller sizes selling well with very strong demand for 3/4's. Lower fancy shape price points attracting price sensitive buyers. Princess demand strong. Relatively weak demand and lower prices for rounds are encouraging manufacturers to shift production back to fancy shapes. Extreme price differentials between excellent/fine and average cut fancy shapes. Caution: Prices for green, grey and brown tinted diamonds 10-15% below non-tinted. Green tint often indicates Marange origin.
Global Markets
United States: Wholesale trading is steady as dealers work to fill last minute demand before Christmas. While retail jewelry sales tapered off since Thanksgiving weekend, along with most retail categories, sales are expected to rebound in the coming final two weeks of the year, especially in the higher priced items. Among diamond dealers, there is good demand for smaller fancy shapes with princess, pears and cushions selling particularly well. In rounds, demand is focused on SI- goods, with nice-make GIA certified diamonds in competitive supply.
Belgium: While inter-dealer rough and polished trading has softened slightly, polished demand remains stable from U.S. and Far East wholesale and retail customers. Prices are holding steady for goods required to fill specific orders but offers to buy inventory are still too low for suppliers to take seriously. There is good demand for G-I, VS-SI goods with improved demand for collection VS goods. Demand for collection VVS stones remains weak.
Israel: The market is stable with good demand from U.S. customers. Suppliers are pushing for final Christmas orders and note steady demand for 1-carat, 1.5-carat and oversize, SI- goods, particularly from the U.S., as well as nice, non-certified pique goods. Rough dealers are waiting to see De Beers boxes from this week’s sight but initial demand for them on the secondary market is weak as De Beers is considered expensive relative to other sources.
India: Polished trading eased slightly as demand softened from foreign and local buyers. Overseas buyers focused on filling their final holiday requirements, while domestic buyers worked to satisfy demand for the ongoing wedding season. There is good demand for SI- stones and some shortages in nice-make, SI-, GIA certified goods. Rough trading is relatively stable but dealers remain hesitant regarding De Beers goods during this week’s sight. There is sufficient rough supply as manufacturing continues at reduced capacity with some workers still away due to the wedding season. The exchange rate remained relatively stable this week.
China: There has been little change in market conditions during the past week with buyers focused on filling orders and still cautious to make inventory purchases. Most are waiting for January to assess whether recent polished price stability will hold and influence some buyer confidence ahead of the Chinese New Year season. This week’s China International Jewellery Fair in Beijing has spurred some interest among diamond buyers but is not expected to significantly boost trading.
Hong Kong: Wholesale demand remains slightly weak as buyers are hesitant about global economic trends and political changes taking effect in China. Dealers expect overall caution to continue through the first quarter of 2013. Still, suppliers are holding polished prices steady and there is good demand for fancy shape, D-G, VS-SI diamonds. Retailers note steady tourist traffic in the city but consumers have lowered their per-ticket spending.
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