RAPAPORT... Overall, in the past 30 days, the trading activity in the U.S. market has increased, compared to the extended summer slowdown that marked the past few months. While there are still those who complain about a lack of action, most businesses have experienced a pickup in activity. “Actually, we are fielding a lot of increased activity after the slow summer,” said Ami Koret, of Davidoff Diamond Corp.
Another source, who wished to remain unnamed to avoid leaking information about his company to his competitors, more or less concurred. “While the summer was very, very quiet, the past few weeks, it has started to pick up a bit more than usual,” he said. “It remains to be seen if everyone has priced themselves out of the market, however. I still believe in the large goods, which you generally can sell even if it is quiet. Those with everyday, smaller goods are probably in for some trouble, but if you finish a nice stone of size, you can sell it in no time.”
For some, however, it is still too soon to tell how September was. “August was an exceptional month for us,” said Chad Haggar of Kristall, Inc. “The Diamond Promotion Service (DPS) has done a great job in getting the industry on board with Journey. After right-hand rings, it is just what we needed.”
Of course, not everyone has experienced the upsurge in business. “It has been very, very, very slow,” said one industry wholesaler, who requested anonymity to protect her business. “Since July, it’s been really tough. I have customers all over the U.S. and the general consensus is that, since diamonds are a luxury product, people are putting off that purchase. Living expenses have risen so much and gas was so high for so long that diamonds really aren’t a priority at the moment. In addition to the tightened purse strings, the sale of diamonds over the internet has had a negative effect as well.”
Gearing Up For the Holidays
While doing business in the first part of the year is important, everyone knows that the period that makes or breaks the year is the holiday season in the last month. Therefore, much time is spent speculating beforehand about what the outcome might be. So far, the outlook appears to be positive.
Eugene Biro, from the eponymous company, offered this take. “This market is very cautious right before the season, but we feel that the underlying demand is there and consequently, we feel that it will be a very good season this year. The interest is there and we get requests and inquiries all day long, mainly in the SI1 to SI2 clarities and G to H colors—that is our strength and we cater to that crowd.”
Haggar also sees reason to be positive. “I am optimistic about the season. I think that the recent drop in oil prices and gold has been heaven-sent,” he remarked. “Also, the stock market rally will hopefully have a positive effect on consumer confidence, in spite of the slowdown in the housing market.”
Koret, for his part, can barely contain his enthusiasm. “I am very positive and very confident that we’ll have a good Christmas, of course without any unforeseen events,” he said. “If it keeps going like it is now, it will be a very good season. I think that either the inexpensive goods like earrings and bracelets and/or the very expensive goods will be popular. And with the large stones, there is such a big shortage.”
Trends
As has been the case lately — and as evidenced by Koret’s comment above — the bigger the stone, the higher the chances that it will be in demand. Currently, 4 carats and up, especially in the I+, VS2+ range, are experiencing shortages and have been for some time. Goods with the same color and quality, but in the 1 to 1.75 carat range are also fairly healthy, although there have been reports of a continuing slowdown in stones that size and smaller.
In terms of fancies, the category as a whole is very healthy. More specifically, princesses and Asschers are in very good demand, but the former is in short supply. The same can be said of marquises and even hearts, both of which have experienced a relative increase in requests. Lastly, pears and ovals are healthy as well.
Regarding fancy colors, Koret has noticed more demand, especially in fancy yellows. “There has been a very big increase in the number of calls our firm has received for fancy colors. There was always demand, but the prices went up so fast that I think that people had sticker shock there for a while. Now, though, people are used to the prices and the requests are really starting to pick up.”
The Marketplace• Trading activity picks up slightly.
• Polished prices are moderate.
• Rough prices remain mixed.
• Smaller goods see more demand.
• 4 carats and up are in short supply.
• Fancies enjoy healthy activity.
• Princesses and Asschers are very strong.
• Pears and ovals are doing very well.
• Hearts and marquises keep improving.
Article from the Rapaport Magazine - October 2006. To subscribe click here.