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Market Comments 1/17/2013
Jan 17, 2013 6:00 PM
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Market sentiment improving ahead of
Chinese New Year but Far East retailers cautious. Chow Tai Fook warns of
sluggish luxury growth as 3Q sales +4%, same store sales -8%. All eyes on the
rough market with small De Beers sight expected next week as manufacturers
reduce their 2013 rough purchasing budgets. Harry Winston to sell luxury brand
to Swatch for $1B. Rio Tinto’s 4Q diamond production +9% to 3.25M Cts. Lazare
Kaplan 2Q sales -28% to $16M. U.S. Nov. polished imports +22% to $1.9B, polished
exports -11% to $578M. India’s Dec. polished exports -37% to $950M, rough
imports +35% to $1.8B. Belgium’s Dec. polished exports -18% to $998M, rough
imports +13% to $930M.
Fancies: Fancy market steady. Smaller sizes
selling well with good demand for 3/4’s. Lower fancy shape
price points attracting price sensitive buyers. Demand for Princess replacing Cushions. Good Far East
demand for Pears while ovals in short supply. Marquise
weak. Improving demand for fancies at attractive price points encouraging
manufacturers to shift production to fancy shapes. Extreme
price differentials between excellent/fine and average cut fancy shapes.
Global Markets
United States: With mixed reports still filtering through regarding the holiday season, jewelry market sentiment is cautious and diamond buying is restrained. Retailers are not urgently looking to replenish sold inventory and are buying selectively. Their focus is now on Valentine’s Day and many retailers are preparing to launch promotions, particularly for their bridal lines, ahead of February 14. Wholesale demand is focused on commercial round goods up to 2 carats, G-H, SI- GIA-certified stones with princess and cushion cuts being the strong fancy shapes.
Belgium: Trading is better than many expected for this time of year and the mood in Antwerp has subsequently improved. Buyers are still selective and price sensitive with steady demand for bread and butter 1-carat, G-H, VS-SI GIA-certified goods. Polished inventories are relatively steady and sufficient to satisfy current demand. Rough trading is quiet with dealers hesitant to buy before next week’s De Beers sight.
Israel: Dealers are growing increasingly optimistic about the market as Far East and U.S. demand remained relatively stable through December and January. Trading has improved but there is still hesitation as buyers are uncertain regarding prices. There is good demand for round, 1-carat, F-I, SI certified goods while fancy shapes continue to offer strong value. Demand is good for pear, oval and princess cuts. Rough trading is cautious ahead of next week’s De Beers sight.
India: Polished trading remains subdued due to weak demand even as supply remains tight. Buyers are cautious due to growing price differences with suppliers. There are still very few foreign buyers in the market, while domestic demand remains soft. There is good Far East demand for dossier, VS-SI stones. Similarly, rough trading remains limited with the lower volume of supply being sufficient to sustain the market for now. Rough dealers are looking for goods that yield polished in SI and lower clarities. Manufacturers are still shifting production to fancy shapes and overall manufacturing continues at below capacity. The exchange rate remained basically stable this week.
China: Diamond demand has improved as jewelry retailers prepare for the Chinese New Year Golden Week that begins on February 9. They are building inventory with caution and no speculative buying is taking place. Wholesale trading is expected to slowdown in the final weeks before the holiday. Overall, expectations are for a better year than 2012 but the market remains cognizant of the difficult economic environment. There is good demand for 0.30-carat to 0.40-carat and 1-carat, D-H, VS-SI certified goods and improving demand for non-certified K-M colors used in promotional jewelry.
Hong Kong: Trading is more cautious than in other markets as economic sentiment remains subdued. Dealers are completing their preparations for the Chinese New Year and wholesale trading is expected to slow in the coming weeks. Retailers are hoping for an influx of tourists from Mainland China during Golden Week that will set a more positive tone for the year.
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