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Market Comments 8/13/2015
Aug 13, 2015 6:00 PM
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India IIJS show good for
gold, not good for diamonds. Low expectations for Sept. HK show as Chinese
demand continues to drop along with their currency and stock market. NY market
waking up as cash buyers seek good deals and picky buyers forced to pay full market
prices. Rough markets under extreme pressure as ALROSA, DeBeers allow clients
to reduce and refuse purchases. Lucara 2Q sales -46% to $38M. Sarine 2Q sales
-42% to $14M, profit -69% to $3M. Asian Star 1Q sales -3% to $128M, profit -6%
to $3M. Shrenuj 1Q sales +6% to $219M, profit +2% to $3M. Blue Nile 2Q sales
+7% to $114M. U.S. June jewelry sales -1.3% to $4.6B. HK 1H polished imports
-4% to $9.3B, exports -2% to $6.6B.
Fancies: Demand soft. Pears, Ovals and Cushions steady, Princess,
Hearts slow. Prices for curves improving slightly. U.S. demand supporting
market for commercial-quality fancies, especially for sizes under the carat.
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: Wholesalers have returned from their summer vacations with improved sentiment and rising expectations for the holiday season. Still, trading remains cautious with buyers being selective and looking for bargains. There is good demand for large diamonds above 5 carats, and steady demand for 1-carat to 3-carat, F-I, VS-SI, triple EX diamonds. Melee is relatively slow. Retailers note steady sales of engagement rings and wedding jewelry, which continue to uphold the market.
Belgium: Trading activity is very slow with most dealers still on vacation. Those still around were focused on the rough market during this week’s ALROSA sale. Trading on the secondary market is quiet with low volume of goods available. Rough dealers are cautious to buy as they suspect prices will drop in the coming weeks. A few Antwerp-based Indian traders were in Mumbai looking for goods and some suppliers participated in the five-day India International Jewellery Show (IIJS) that ended August 10.
Hong Kong: The polished market is stable but quiet. Expectations for the September Hong Kong Jewellery and Gem Fair are low given the prevailing slow trading activity. Buyers are looking to fill existing orders and there is very little inventory buying taking place. Major retailers are not in the market and suppliers sense they’re holding a large volume of dossiers. Some dealers report improved demand for 1-carat to 2-carat fancy shapes. Retail traffic has improved as lower gold prices have brought renewed interest in gold jewelry.
India: Sentiment improved slightly as lower gold prices are fueling high expectations for domestic jewelry sales during the Diwali festival and subsequent wedding season. Diamond trading at the IIJS show was slow as buyer traffic was focused on gold jewelry. Diamond manufacturers continue to reduce their polished production as inventory levels remain high, putting pressure on labor conditions in Surat. There is steady demand for 0.50-carat to 0.70-carat, D-H, VS-SI diamonds and stable demand for 1-carat to 2-carat, G-H, VS-SI diamonds. Overall, dossiers are under pressure and there is weak demand for 0.30-carat, 0.40-carat and 0.90-carat diamonds. There has been some improvement in demand for fancy shapes with good dealer demand for pears, ovals, and cushions.
Israel:Trading is still quiet in Ramat Gan as many dealers remain on vacation. Buyers are looking for bargain deals and are pushing for lower discounts. Suppliers are willing to compromise for cash deals and are hesitant to send goods out on memo. U.S. demand is stable, while Far East demand is slow. There is steady demand for 1-carat, D-H, VS diamonds, while demand is slow for 0.30-carat to 0.40-carat, D-H, SI diamonds. The fancy shape market is stable with good demand for pears and ovals and improving demand for cushions.
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