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Market Comments 7/9/2015
Jul 9, 2015 6:00 PM
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Indian cutters reject rough import ban to support high price levels. Most want to maintain jobs and production at lower polished prices. De Beers expected to keep rough prices high after allowing sightholders to defer 25% of purchases at next week’s sight. 30s-40s very weak. Cutters shifting production to 1ct+. Far East luxury market declining as Chinese stocks drop 6% and trim wealth. Trade hopes investors will consider diamonds. Okavango 1H rough sales -23% to $213M. U.S. May polished imports -3% to $3B, exports -30% to $1.4B. Israel 1H polished exports -17% to $3B, rough imports -21% to $1.6B. Rapaport releases statement about diamond specifications and Rapaport Price List.
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: The market is stable but quiet as many diamantaires are still on summer vacation. Buyers seeking deals are sensing that suppliers want to offload excessive inventory. Program suppliers to the major retailers are doing business. There is steady demand for 1-carat and larger, G-J, VS2-I2 diamonds and good demand for triple EX diamonds, which are in short supply. In fancy shapes, ovals and cushions remain the best sellers, while demand for pears and marquise cuts is improving. Independent retailers report lighter traffic but steady sales compared with this time last year. Bridal lines remain a mainstay with the summer months being a popular time for weddings.
Belgium: Trading is slow and dealers are waiting for further indications of price trends. Confidence has been further eroded by bankruptcies in India that are affecting some Antwerp-based subsidiaries. Liquidity is tight and suppliers are still holding relatively large inventories of polished. There is steady demand for round, 0.70-carat and 1-carat, G-J, VS-SI, triple EX goods. In fancy shapes, there is good demand for ovals larger than 1-carat and pear shapes. Rough trading is sluggish and sentiment is weak among rough dealers and manufacturers.
Hong Kong: Dealer confidence improved slightly and there’s some activity, even though the market is generally quiet during the summer months. Dealers are hoping that prices will stabilize to help lift confidence further. Triple EX diamonds continue to garner better discounts than lower-quality goods. There is stable demand for round, 1-carat, D-J, VS-SI, triple EX diamonds, while demand is weak for 0.30-carat to 0.50-carat, G-J, VVS-SI goods. Jewelry retailers remain cautious with some concern about consumer luxury spending following this week’s stock market collapse in China.
India: Sentiment is weak as dealers and manufacturers navigate declining polished prices, expensive rough and tighter credit. The industry seems split on how to restore growth, with calls to temporarily ban rough imports ultimately dismissed this week at an industry-wide meeting in Mumbai. An appeal for self-discipline is expected to lead to broad rejections at next week’s De Beers sight. Polished trading is stable but the downtrend continues with some large-scale manufacturers actively lowering their prices in an effort to boost turnover and raise liquidity levels. Demand remains weak for laboratory-graded, round, 0.30-carat to 0.40-carat, D-F, VVS-SI diamonds, while these goods are easier to move without grading reports.
Israel: The polished market is slow but stable, with local dealers seeking specific goods to fill orders. That can be difficult due to shortages of in-demand, better-quality diamonds. There is steady U.S. demand for commercial-quality diamonds and some Far East demand for difficult-to-find better qualities. Overall, there is good demand for 1-carat and larger, G-J, VS2-SI, triple EX diamonds, while interest remains weak for 0.30-carat to 0.40-carat, G-J, VVS-SI goods. Dealers looking for buying opportunities are being patient. Rough sentiment is weak and trading is cautious ahead of next week’s De Beers sight.
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