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Market Comments 10/30/2014
Oct 30, 2014 6:00 PM
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Polished trading quiet with Indian market closed for Diwali holiday. U.S. market stable with good demand for commercial-quality SI-I2 diamonds. Cash buyers gain higher discounts as suppliers seek to boost liquidity. Rough trading slow while sightholders hope for lower prices at next week’s De Beers sight. Petra Diamonds sells 232.08ct. rough for $15M ($65,577/ct.) to Diacore. India’s Sept. polished exports +11% to $2.7B, rough imports +16% to $1.5B. Titan’s 2Q revenue +56% to $580M, profit +29% to $39M. Blue Nile’s 3Q revenue +7% to $106M, profit -43% to $1.7M. Rio Tinto says record prices at Argyle pink diamond tender. Botswana to appoint new mines minister following elections.
Fancies: Fancy shape market steady with fair demand for excellent cuts and larger sizes. Market is spotty and selective. Good prices if you have a buyer but dealers are not buying for inventory resulting in significant discounts. Healthy U.S. demand maintaining price levels for commercial qualities. Curves (Pears, Ovals) doing better than Squares (Emerald, Princess) in larger sizes with Squares doing better in under the carat sizes. Far East becoming more aware of fancy shapes. Buyers selective regarding shape- and cut-quality with significant 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 as jewelry wholesalers gear up for last-minute orders before the Christmas shopping season. There is steady demand for commercial-quality below 1-carat, H-J, SI-I2 goods, while demand for fancy color and fancy-shaped diamonds is steady. In general, the market has been subdued since the September Hong Kong show. At the retail level, jewelers have mixed expectations for the Christmas season, although most expect overall U.S. jewelry sales to show modest growth during the fourth quarter and for the full year. Jewelers note steady engagement ring sales during this time of the year. Retail prices for jewelry have softened on average due to declining precious metals and polished diamond prices.
Belgium: The polished market is adjusting to recent price volatility and trading in Antwerp has been relatively quiet. There is steady demand for 0.50-carat to 0.90-carat diamonds and a reported shortage of better-quality goods in this category. Demand for VVS and better clarity goods remains weak in most sizes. In fancy shapes, ovals, cushions and heart shapes are selling well. Liquidity remains tight among suppliers and cash buyers are able to garner stronger discounts. Rough trading is slow with goods selling at discounts on the secondary market, influencing a subdued outlook for next week’s De Beers sight.
Hong Kong: Polished trading is quiet as buyers are cautious to buy in an environment in which prices are declining. Local demand continues to be negatively affected by the pro-democracy demonstrations as tourist arrivals have declined. Sentiment is weak after Hong Kong’s jewelry and watch sales fell during the October Golden Week compared to last year. There is stable demand for GIA dossiers, while demand for fancy shapes has slowed as dealers remain uncertain about price levels.
India: The market remains effectively closed during the ongoing Diwali festival vacation period. Businesses are expected to remain closed until the beginning of November while many factory workers prolong their vacations for an extra week or two. Consequently, there are very few foreign buyers in the Mumbai market. There is some local demand for GIA dossiers in lower colors and clarities. Similarly, rough trading is weak. There were positive reports about jewelry retail sales during Diwali, driven by steady gold demand.
Israel: Polished trading is slow as dealers adjust to recent price volatility. The trade is back to normal activity following sporadic trading during the Jewish holiday period earlier in October. Local dealers are focused on the U.S. market and there are mixed expectations for the Israel Diamond Week in New York taking place on November 10 to 13, with more than 200 companies registered to attend.
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