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Market Comments 7/17/2014
Jul 17, 2014 6:00 PM
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Mumbai IIJS show opens with mixed expectations for domestic diamond and jewelry demand. Some Indian manufacturers reducing prices for better quality carat and larger sizes, Global diamond markets are quiet with cutters frustrated by high rough prices during sight week. De Beers 2Q production +7% to 8.5M Cts. Rio Tinto 2Q diamond production -7% to 3.8M cts. Belgium’s June polished exports flat at $1.4B, rough imports +20% to $1.3B. Christie’s 1H jewelry, watch and wine sales +11% to $456M. Sotheby's appoints Daryl Wickstrom as MD of new global jewelry and watch division.
Fancies: Fancy shape market steady with fair demand for excellent shaped and larger polished sizes. Cutters are moving to fancy shapes because of significantly high rough prices for identical quality round diamonds. Curves (Pears, Ovals) are doing better than Squares (Emerald, Princess) in larger sizes with squares doing better in under the carat sizes. Increasing demand for 30-point Princess cut. Far East markets becoming more aware of fancy shapes. Buyers very selective regarding shape- and cut-quality with extreme price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and hard to sell even at very deep discounts.
Global Comments
United States: Polished trading is quiet but stable with dealers slowly returning from their summer vacations. There is good demand for commercial-quality diamonds under 1-carat, G-K, VS-SI, and steady demand for melee goods. Dealers are keeping a watch on the India International Jewellery Show (IIJS) taking place this week for possible signals regarding the melee market ahead of the Diwali season in India. Larger retail jewelers typically refrain from bulk diamond inventory buying during the current period of the year, but independents are cautious about prevailing market conditions. Retail jewelry sales are stable with a strong emphasis on bridal during the ongoing summer months.
Belgium: Polished trading has slowed with dealers readying for their upcoming summer vacations. Buyers are looking for what they need to fill existing orders and there is no real urgency to find goods. There is steady demand for lower-color diamonds in all sizes, while demand for higher colors is centered on VS-SI clarity goods. Rough trading is stable but cautious as rough prices remain high relative to the resulting polished. Liquidity remains tight and manufacturers are coming under increased scrutiny by the local banks.
Hong Kong: The market is typically quiet for this time of the year with no major holidays scheduled to boost trade. There is select demand for polished with dealers focused on commercial-quality diamonds below 1-carat. There is also rising demand for non-certified diamonds as delays continue for 0.30-carat to 0.90-carat diamonds at the Gemological Institute of America (GIA).
India: Polished trading has improved slightly with some orders taking effect before the IIJS show that takes place from July 17 to 20. There is some concern that one or two larger suppliers are reducing prices and that others will be forced to follow. Buyer sentiment has grown cautious as they expect there may be further price declines in the works. There is stable demand for GIA dossiers, G-J, VS-SI goods. There is also improving demand for fancy shapes, particularly pears, cushions, and princess cuts.
Israel: There is good demand for specific categories of polished diamonds with 0.30-carat to 0.75-carat, D-K, VS-SI GIA dossiers under consistent demand. Overall, dealers are looking for goods suitable for the U.S. market such as SI and lower clarity goods as the U.S. is currently the strongest market for Israeli polished. There was also a notable presence of Indian buyers in Ramat Gan this past week but most are expected to return to Mumbai for the IIJS show. Suppliers expect the market to remain quiet through the July-August summer months.
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