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Market Comments 3/7/2013
Mar 7, 2013 6:00 PM
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Strong Hong Kong show exceeds expectations with much better business than last year. Excellent demand for 0.30-0.40 ct., F-I, VS-SI, goods. 3X bringing 5-8% premiums with some buyers taking VG due to shortages and higher prices for 3X. RapNet Diamond Index (RAPI) for 1 ct. polished diamonds +0.2% in Feb. Rough trading slows as speculative dealers can't sell high-priced purchases. U.S. confidence mixed as Dow Jones hits record high but March spending cuts slow economic growth. U.S. Jan. polished imports +11% to $1.7B, polished exports +29% to $1.5B. Botswana Dec. diamond exports -39% to $140M, FY exports +20% to $4.4B.
Fancies: Fancy market steady. Smaller sizes selling well with very good demand for Princess cuts. Demand for large 7ct.+ better quality fancies improving. Lower fancy shape price points attracting price sensitive buyers. Strong demand for under the carat Princess cuts. Cushions relatively weak but doing better as oversupply eases. 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: Polished diamond demand is stable with retailers focused on their bridal lines ahead of the spring and summer months. Demand for large diamonds is improving and high-end jewelry sales are holding up. Consumer confidence is steady, particularly among upper income households, while the middle-income earners remain cautious amid concerns that the automatic sequestration spending cuts that took effect on March 1 might restrain economic growth.
Belgium: The mood in Antwerp has improved due to steady polished trading in recent weeks and as expectations rose for the Hong Kong International Jewellery Show (March 5-9). There are pockets of strong trading with good demand for 0.30-carat to 0.50-carat, VS-SI stones, but with weaknesses reported in better quality goods. Rough trading is steady with good demand and high prices achieved at recent Antwerp tenders.
Israel: Trading in the bourse is relatively quiet as many suppliers and buyers are at the Hong Kong show. Sentiment in Ramat Gan has been fairly positive in the run up to the show with good demand for dossier certificates in VS-SI clarities. Initial reports from Israeli exhibitors indicate that this trend is continuing. There remain concerns about speculation in the rough market after dealers bought goods at high prices in recent tenders with the hope that higher prices will emerge in the secondary market.
India: Local polished trading has slowed as domestic and foreign buyers are focused on the Hong Kong show. There is a shortage of 0.30-carat to 0.50-carat, VS-SI and triple EX polished goods as cutters have been slow to ramp up manufacturing in 2013. Manufacturing is expected to increase in the new fiscal year beginning April 1. Polished buying is selective as dealers are waiting to assess price trends from Hong Kong. Rough trading is steady and goods are selling at premiums on the secondary market. There is good demand for rough that produces polished in SI- clarities. There was a slight depreciation of the rupee during the week to trade at INR 54.71 to $1 on Thursday.
China: Wholesale trading is stable with many buyers looking for goods at the Hong Kong show as dealers look to replenish sold inventory following the Chinese New Year. There is a shortage of certified, 0.30-carat to 0.50-carat, VS-SI, triple EX diamonds, which are currently the hot items in the market. Prices are steady while buyers are surprised by the recent uptrend in 0.30-carat sizes. Retail sales are relatively quiet, with steady demand for bridal goods ahead of the spring and early summer months.
Hong Kong: The show started on a positive note with steady visitor traffic and good demand for certified 0.30-carat to 0.50-carat, VS-SI goods and excellent demand for triple EX stones, which are in short supply. The market is active with buyers coming mainly from Mainland China and Asia. Suppliers are trying to push for higher prices in those in-demand goods but with varying success.
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