The
diamond market was steady in April after a strong first quarter. While the
Baselworld show
in Switzerland failed to bring a significant boost
to the market due to low attendance by diamantaires, expectations were
relatively high for the JCK Las Vegas fair and upcoming shows in Antwerp and
Geneva.
Polished prices were stable
during the month, with the RapNet Diamond Index (RAPI™) for 1-carat diamonds
increasing 0.2% between April 1 and 24, and prices of 0.30-carat stones
slipping 0.6%. RAPI for 0.50-carat stones was flat, with the index for 3-carat
diamonds creeping up 0.1%.
Demand
up
While
polished prices are showing minimal growth, rough prices continue to climb,
prompting concerns about slim profit margins for manufacturers and traders in
the midstream.
Prices at Petra Diamonds’ two
rough tenders in the January-to-March period were 5% higher than during the
preceding six months, the miner noted. Strong retail sales over Chinese New
Year and Valentine’s Day prompted robust rough demand during the quarter from
companies looking to replenish their stocks, the producer explained.
De Beers also raised prices
by about 1% to 2% in certain larger categories at its April sale, according to
sightholders.
“While the second quarter of the year is traditionally a
seasonally slower period, we continued to see good rough-diamond demand in the
third sales cycle of 2018, as diamond businesses have focused on restocking
following healthy consumer demand for diamond jewelry in the US and China,” De
Beers CEO Bruce Cleaver said.
The summer vacation season in
India is likely to suppress rough demand in May and June as cutting factories
restrict production due to workers’ absence, sightholders said.
Positive
retail outlook
Retail
demand was robust in the opening months of the year. LVMH Moët Hennessy Louis
Vuitton noted a “buoyant environment” despite the strong euro and geopolitical
uncertainty. Its sales jumped 9% on a reported basis for the three months.
Meanwhile,
China and Hong Kong both recorded strong improvements in general retail sales
at the start of the year, indicating those key markets had recovered from the
downturn of the past
few years.
“Retail sales strengthened
visibly in the first two months of 2018, showing double-digit growth in value
terms over a year earlier, thanks to favorable job and income conditions and a
further pick-up in visitor arrivals,” Hong Kong’s Census and Statistics
Department said. “The outlook for retail sales should remain positive in the
near term.”
Article from the Rapaport Magazine - May 2018. To subscribe click here.