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Steady Chinese Demand Lifts Mediocre Hong Kong Show
Buyers Focused on Lower Price Points
Sep 16, 2013 9:23 AM
By Avi Krawitz
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RAPAPORT... Diamond exhibitors reported mixed sales at the Hong Kong Jewellery and Gems Fair as buyers focused on lower-price-point, commercial diamonds ahead of the fourth quarter. Prices held relatively firm throughout the show maintained by steady Chinese demand for smaller certified goods.
“There’s still resistance in pricing, especially from the Indians,” said Dror Marom, regional manager of China for Dalumi Diamonds. “But Chinese customers are showing some flexibility because some items are in high demand and they need goods in time for the holidays.”
Most polished suppliers who spoke with Rapaport News noted that activity in the diamond section of the show was dominated by buyers from Mainland China as they shopped for goods ahead of the October Golden Week, which is the second-busiest retail season in China after the Chinese New Year.
Marom explained that Chinese buyers as a group have grown in stature in the past few years as the Chinese market has become more competitive and retailer’s margins in China have tightened. “The Chinese buyer is becoming more professional. They understand the assortments very well and know what they want,” he said. “They also don’t have big margins. But because the peak season is coming up they came to the show with the intention to buy.”
Exhibitors reported that there were fewer active Indian buyers in Hong Kong this year than in previous years as they continue to be weighed down by the volatile Indian rupee against the dollar. Similarly, buyers from emerging Far East economies such as Malaysia and Indonesia featured less prominently at the show than before, which some attributed to the weak currencies in those markets.
Tony Mehta, the owner of Diasqua Group, noted that Indian buyers focused on buying lower-end goods, while the higher-end Indian buyers were not active at the show. “In general, buyers were looking for lower colors and intent on spending less money,” Mehta said. “Even the larger goods that sold were in the cheaper ranges.”
Mishael Vardi, the owner of VMK Diamonds, a supplier of fancy color diamonds, added that buyers are looking for different types of goods as they hunt down attractive price points to meet their limited budgets. He noted that prices for fancy color diamonds held firm at the show. “The feeling is that people have money but want to spend it wisely and will pay cash for the right goods,” Vardi said. “It’s really about price points in the commercial goods.”
Others at the show agreed. Dealers reported that the smaller, pointer-size, certified goods were the strongest, continuing a market trend throughout 2013. There was strong demand for 0.30 to 0.60-carat, G-, VS-SI, Triple EX goods, while demand for J-M, VVS goods in the same sizes was steady. Similarly, they indicated stable demand for 1 carat, J-M, VS-SI goods. Demand for larger, better-quality diamonds was relatively weak, while some reported a bit of weakness in the 0.70 to 0.99-carat category. Demand for fancy-shape diamonds was steady.
One Israel-based polished supplier observed that there is strong demand for dossier certified diamonds below 1-carat in all categories, adding that there is a shortage of these goods in the market. “Demand for dossiers is crazy and you can sell very easily,” he said. “There is a shortage of these goods in the market. The problem is that you can’t replace them so easily because of the higher prices and because there just isn’t enough goods on the market.”
The September Hong Kong show was split between two venues with loose diamonds being exhibited at the Asia World Expo from September 11 to 15. The finished jewelry exhibition is taking place at the Hong Kong Convention & Exhibition Centre from September 13 to 17.
Many Israeli exhibitors left the show after the first two days due to the Yom Kippur Jewish holiday that fell on Saturday. Israeli exhibitors noted that the two days they attended were very busy as buyers knew they had a limited timeframe to make appointments.
As a result, dealers noted that traffic was strong on the first two days of the show but dwindled over the weekend. Most dealers estimated that visitor traffic in the diamond pavilion decreased compared to the September 2012 show.
“The show was okay, not bad, but I think it was slower than last year because a large percentage of Indian buyers were not there,” said one Mumbai-based supplier. “So the Chinese were okay and I think the October Golden Week will be an important indicator for the market. For now, customers are being picky so the show was mediocre. Nothing great.”
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Tags:
Avi Krawitz, diamonds, Hong Kong Jewellery & Gems Fair, jewellery, Jewelry, Rapaport
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