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Israel
By Avi Krawitz
Israeli diamantaires left Las Vegas relatively satisfied that U.S. demand is sustaining the market even if they gave mixed reviews about the show. “It’s been a challenging show,” said Shmuel Schnitzer, chairman of the Israel Diamond Institute (IDI), which organizes the Israel pavilion at trade shows. “But it’s better than other shows because the U.S. market is better than other markets. People came with high expectations, which were met for some but not for others.” For Ronny Eitany, owner of Regent Diamonds, which supplies diamonds above 1-carat in size, buyers were more serious this year than 2015 and came with very specific orders that were difficult to fill. Eitany noted companies in the midstream reduced their operations and inventory in the past year, working with less goods and taking fewer chances. Still, the industry is in a better place than it was six months ago, according to Leibish Polnauer, president of Leibish & Co., an online provider of colored diamonds, gemstones and jewelry. Polnauer explained lower demand emanated from China, where the government has clamped down on cash transfers, and Russia, which was impacted by the slump in oil and the depreciation of its currency in 2015. “Those issues are slightly behind us as commodities have recovered a bit and we’re looking at a better year so far,” he said. Polnauer stressed the industry needs to rebuild the image of the diamond as “it lost some of its luster” to colored gemstones and even lab-grown diamonds. As a result, Polnauer, who did not exhibit in Las Vegas, said sales volume is down but more big-ticket items are being sold. “While the regular business for commercial goods is weak, we’re making higher-value sales, which tells me people see value in diamonds,” he explained. “Millennials want color, size and price.”
Having returned from Las Vegas, 50 Israeli companies headed to the June Hong Kong Jewellery & Gem Fair, which took place after press time. Eitany suggested that while the U.S. is helping stabilize the market, growth depends on China, where demand remains weak. However, Schnitzer stressed that Asia remains a focus for Israeli diamantaires. “Despite the downturn in Asian markets, they remain very important targets for our industry,” he said. “We believe the long-term prospects in Asia as a market for polished diamonds are excellent.” Schnitzer added that the Israeli industry will adapt its offerings to meet the demand of the market as it seeks to strengthen its business connections in Asia.
While attendance at the shows aims to improve sluggish polished trading, the Israel Diamond Exchange (IDE) has set a goal to also increase rough trading in the bourse. The third International Rough Diamond Week, which took place at the end of May, included tenders by ALROSA, De Beers, Rio Tinto and Tzoffey’s 1818, while organizers said there is rising interest among other producers to sell in Israel. Among them, Gem Diamonds is considering holding viewings in Israel of its high-value production from the Letšeng mine in Lesotho, according to Brandon de Bruin, the mining company’s sales executive. Yoram Dvash, IDE’s president, stressed that the local industry needs a strong manufacturing base and the exchange is doing everything possible to ensure that a steady supply of “the right rough” is available at attractive prices. IDE subsequently announced a program to offer a special allocation of rough to young diamantaires under the age of 40. The first parcels of rough were supplied by Panford (Israel) Ltd., with each manufacturer receiving 40 diamonds with an average weight of 3.27 carats. The goods, which consisted of two commercial boxes of De Beers rough, had a value of $2.25 million and Panford gave the manufacturers 70 days credit for the first allotment. Dvash stressed that IDE aims to make this a regular supply of rough for these manufacturers as a way to “boost manufacturing in Israel.” In an effort to raise confidence in rough trading, IDE signed an agreement with Sarine Technologies mandating the equipment maker to disclose to IDE members if inclusion mapping has been done on rough using Sarine’s Galaxy machines. The agreement aims to prevent rough sellers from concealing that prior inclusion mapping has taken place, since the machines don’t always indicate that mapping has occurred. Sarine collects information of all unmarked stones that are scanned by the Galaxy machines and is therefore able to provide this information to IDE members upon request. At the recent World Diamond Congress in Dubai, Dvash proposed that the World Federation of Diamond Bourses (WFDB) adopt the IDE’s agreement with Sarine as it will help bring greater transparency to the industry as a whole.Article from the Rapaport Magazine - July 2016. To subscribe click here.
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