Rapaport Magazine

Israel

By Avi Krawitz
Industry Changes Bring Uncertainty

Polished dealers and manufacturers recognized that the market has slowed in the second quarter of 2013 after a relatively positive start to the year. Uncertain of what lies ahead, they were hoping the Vegas shows would create some positive trading momentum that was lacking in May.
   “We’re in a period where the market has been stable but it’s as if people are waiting for something to happen, and it’s not happening,” said Natan Friedman, a polished dealer and specialist in fancy color diamonds. “There is business going on but it is focused on the larger companies who have the goods, as well as the marketing reach to dominate the market. It’s very difficult for smaller operations to compete with them.”
   Simeon-Lee Loon, marketing manager at Waldman Diamond Company (WDC), a manufacturer and dealer of polished diamonds, agreed. He suggested that larger Indian manufacturers, who have access to financing, are able to buy bigger volumes of rough at high prices, thus setting the tone for the market in terms of the type of polished goods that are available and the prices they command.
   “We used to be able to explain the market and plan accordingly, but things are not working as they used to or as one might think they should,” Loon said. “Price is no longer a function of rough supply or end consumer demand. These are minor factors today.”
   Friedman added that it has become more difficult to buy polished in the Indian market because Indian dealers have improved their systems and become more efficient. “They’re also getting better certs than before so the opportunity for us to upgrade the stone and make margin is reduced,” he explained.

Competition for Polished
   With so many Israeli buyers in the market actively looking for goods, Loon noted that they often find better deals in the local bourse than overseas. Certain goods — especially .30-carat, VS to SI, triple EX goods — are in demand and if you have them, you can sell them at a good price, he added. However, competition for those in-demand polished goods is strong, given that they are select and difficult to source in the current market.
   In addition to the large Israeli delegation of suppliers at the Vegas shows, many dealers traveled there looking for goods to buy. They recognize that the U.S. has emerged as a valuable supplier of polished in recent years, in addition to being Israel’s largest polished export market. “The U.S. market is difficult, but it is okay,” Friedman said. “It’s changed in the past few years from being mainly a consumer market to being a vendor today.”
   Despite the perception of shortages, Loon said that there is sufficient polished in the market. The fact is there are a lot of goods circulating in the market because businesses throughout the pipeline are trying to reduce their inventories, he explained. The problem, Loon said, is that “the overall volume of business is lower than in the past. While the first quarter was better, the second quarter has slowed. It’s just very difficult to read the market. It used to be clearer what we had to do. If we were approaching a particular sales or holiday season, we had to stock up. Now we’re working according to a much shorter-term outlook.”

Another Diamond Week
   In planning ahead for the end-of-year holiday season, the Israel Diamond Exchange (IDE) scheduled a late-summer edition of the U.S./International Diamond Week for August 26 to 29 in Ramat Gan. The event, organized in partnership with the New York Diamond Dealers Club (DDC), will follow the same format of previous events that took place in New York and Israel and proved very successful.
   “Diamond traders have a need for this type of show,” said Yair Sahar, president of IDE. “It presents a unique business platform, the first of its kind in the world, at minimum cost and with maximum security — with no need for costly booths or advertising and marketing expenses.”
   Sahar added that the timing of this event provides diamond traders with an opportunity to replenish their polished inventory with new goods directly from manufacturers in advance of the September Hong Kong show and the year-end holiday season.

IDI Excellence Awards
   The Israel Diamond Institute Group of Companies (IDI) presented its excellence awards at a gala dinner marking the end of the CIBJO-World Jewellery Confederation Congress that took place in Tel Aviv in May.
   The award for outstanding diamond jewelry design with a special connection to Israel was presented to Avraham Dayagi Diamonds for “The Dove of Peace,” which features a 1.22-carat diamond in the shape of a dove, surrounded by 65 round diamonds weighing .34 carats, set in pink gold with a white gold chain. The second award — for most exceptional diamond cut —was presented to Mordechai Turgeman Diamonds.

Article from the Rapaport Magazine - June 2013. To subscribe click here.

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