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Market Comments 6/23/2011

Jun 23, 2011 6:00 PM  
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Steady traffic as Hong Kong show opens with high expectations for Far East polished demand. Rough trading strong with high teen premiums for Indian DTC goods as BHP Billiton prices rise about 10%-15%. India’s May polished exports +24% to $2.2b, rough imports +44% to $1.4b. Israel’s May polished exports +82% to $1.1b. Botswana’s April diamond exports -19% to $208m. Tiffany & Co. opens regional base in Dubai. Civil society walks out of ineffectual KP intercessional meeting while Zimbabwe vows to export Marange diamonds with African and Asian support. TRADE ALERT: MARANGE GOODS EXPECTED TO BE RELEASED SHORTLY. RESPONSIBLE BUYERS SHOULD REQUIRE SUPPLIER GUARANTEE THAT THEY ARE NOT SELLING  THESE DIAMONDS TO THEM.

Global Markets

United States: There is rising optimism among wholesalers and retailers for a positive Christmas sales season. Following the JCK Las Vegas show, reports indicated that retailers are starting to fill their inventories, having diminished their stock during the first half of the year. Still, the market is being driven by bridal demand while there has been a shift towards less expensive goods for fashion jewelry, with increased popularity for silver jewelry. As a result, demand is strongest for 0.5-carat to 1.5-carat, G-H, SI goods which are traditionally set in engagement rings. Wholesalers report a shortage of SI clarity stones in these sizes.

Belgium: There remains good demand for polished as a seller’s market prevails at high prices. There is a significant amount of foreign buyers in Antwerp looking for goods, particularly as shortages are reported for dossier, G-H, VS-SI stones.  Rough dealers are cautious, with many holding onto goods in anticipation of further price increases, yet also uncertain whether the market can sustain further hikes.

Israel: Steady trading continued in the bourse with good demand for dossier sizes in VS-SI clarities. Many have traveled to the Hong Kong June show as both a selling and buying opportunity as it remains difficult to find polished goods. Dealers specifically report a shortage of SI goods in 1.00-carat sizes and smaller. Some expect a strong push for business in the coming month before the summer break in August. There is rising caution about the rough market following reports of further price increases this week.   

India: There remains strong demand for polished goods but trade has been held back as buyers have grown cautious about prices. Some have cautioned that the market may be overheating. Still, it appears that some larger diamond manufacturing companies are buying up polished to fill orders as they hold back on cutting due to rising rough prices. Demand for rough remains strong with high premiums persisting for the traditional Indian range of goods. There is good demand for -2 and stars, SI and pique, and for dossier goods.

China: Wholesale trading has softened slightly due to the current seasonally quieter retail season. Shortages are apparent within the popular ranges for the Chinese market, 0.30-carat to 1.10-carat, D-H, VS-SI Excellent cut grade GIA-certified stones. Buyers have therefore been active in sourcing goods at various shows this month, including JCK Las Vegas, Jewelry Shanghai and, most importantly for them, this week’s Hong Kong show.

Hong Kong: Expectations are high for the June show which started on Thursday. Good buying has continued even after the Rap List increases last week, with seller’s holding their prices. Reports indicate that trade is being driven by a shortage of VS-SI goods, which is helping spur demand for VVS2 stones. 

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