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Market Comments 6/18/2015
Jun 18, 2015 6:00 PM
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Diamond markets quiet with select demand for fine-quality VS-SI. Slow polished sales resulting in significant excess inventory positions. Post Vegas show U.S. demand not as strong as previous years. Inexpensive small goods and 30s-40s weak. Trading expected to remain soft as U.S. vacation period approaches. Low expectations for June HK show. Rough trading stable after $550M June sight. De Beers 1H rough sales estimated -28% to $2.5B. India’s May polished exports -9% to $1.7B, rough imports -14% to $1.3B. Belgium’s May polished exports -16% to $1.1B, rough imports -7% to $1.1B. Tel Aviv Presidents Meeting highlights challenging diamond market.
Fancies: Ovals and Cushions steady, Pears and Princess improving, Hearts slow. Prices for curves improving slightly. U.S. demand supporting market for commercial-quality fancies, especially for sizes under the carat. Larger sizes softening. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.
Global Comments
United States: Trading is slow but stable in New York. There are shortages of better-quality diamonds in various sizes. Demand is weak for 0.30-carat to 0.50-carat diamonds. There is stable demand for 1-carat to 2-carat, G-H, SI diamonds, while demand is improving for stones larger than 3 carats. Trading is expected to slow with the approach of the July summer vacation period. Retail sales are stable but continue to show year-on-year declines as consumers shift to smaller and lower-quality goods.
Belgium: Trading has slowed in Antwerp following a brief uptick in activity. Sellers are unwilling to accommodate bargain hunters while rough prices remain high. There are growing concerns regarding some Indian diamantaires’ liquidity. There is strong demand for 0.20-carat to 0.25-carat, VVS2-SI diamonds. There is rising investor demand for diamonds larger than 4 carats. Rough trading is stable but diamantaires note that rough is still too expensive and largely unprofitable following last week’s De Beers sight. Rough traders are concerned that less rough will come to Belgium once India’s special zone for rough trading opens in July.
Hong Kong: Trading is stable as companies prepare for next week’s June show. Expectations for the show are low as demand is still soft in China. There is weak demand for 0.30-carat to 40-carat dossiers, as Chinese jewelry manufacturers remain largely absent from the diamond market. There is good demand for 1-carat to 2-carat, D-H, VS-SI diamonds. There is also good demand for fancy shapes with good proportions, which are in short supply. There have been some specific orders for large stones from China recently.
India: Trading is slow in Mumbai. There is a lot of old, lower-quality inventory in the market, while demand is focused on better-quality, triple EX diamonds. Local diamantaires hope that the June Hong Kong show will keep the market churning, but expectations are low. Indian companies are worried about delayed payments from Chinese buyers amid tight liquidity. There is weak demand for 0.30-carat to 0.40-carat dossiers. There is steady demand for 0.60-carat and 0.80-carat, D-H, VVS-VS stones. Demand is also steady for 1-carat, VVS-VS, D-H, triple EX diamonds. Demand for fancy shapes has softened slightly. Rough trading is slow as manufacturers maintain production levels well below capacity.
Israel: Trading is slow but stable in Ramat Gan. There is steady U.S. demand, while Hong Kong demand has improved slightly ahead of next week’s show. There is steady demand for higher-quality goods, which are selling at more competitive prices than lower-quality goods. There is stable demand for 1-carat, D-H, VS-SI diamonds, and for 2-carat to 5-carat, G+, VS-SI diamonds. In fancy shapes, there is good demand for pears and ovals with nice makes and improving demand for cushion and emerald cuts. Israeli manufacturers called on mining companies to lower rough supply to support the market at this week’s Presidents’ Meeting in Tel Aviv.
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