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Market Comments 4/12/2012

Apr 12, 2012 1:00 PM  
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Diamond trading quiet over Passover and Easter holidays. Indian jewelers suspend strike on govt. commitment to review proposed gold and jewelry tax. Liquidity remains tight. ALROSA FY sales +28% to $4.5B, net profit more than doubles to $1B; 1Q 2012 sales +5% to $1B, net profit +23% to $282M. Belgium’s March polished exports +6% to $1.4B, rough imports +7% to $1.4B. U.S. Feb. polished imports -8% to $1.5B, polished exports +5% to $1.6B. Japan’s Feb. polished imports +40% to $70M. GFMS/Reuters survey predicts gold to surge above $2,000/oz. in 2012. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED APR. 13 DUE TO ‎PASSOVER HOLIDAY.‎

Global Markets

United States: Wholesale polished diamond trading slowed slightly but prices are still ‎firm. There is rising demand for square fancy shapes, particularly cushion, princess and ‎emerald-cut stones. In general, demand is focused on 0.90-carat to 2.00-carat, G-H, SI1 ‎category polished. While consumer confidence is still relatively high compared to a year ‎ago, the volume of sales at retail remains subdued. There is growing expectation that the ‎summer wedding season will provide an extra push for bridal jewelry. ‎ 

Belgium: Polished trading has slowed slightly in the past week but remains relatively ‎stable. Buying is cautious and those that are buying for inventory are doing so on a small ‎scale. Rough trading is stable with premiums on the secondary market holding steady ‎since the Diamond Trading Company (DTC) March sight, despite dealer complaints of ‎high prices. ‎

Business activity has slowed ahead of the Passover festival, which begins on ‎Friday. While the bourse is still officially open during the seven-day holiday, many ‎businesses are planning to close in the coming week. There is good demand for 0.30-‎carat to 1.99-carat, G-J, VS2-SI1 stones. There is continued improvement in demand for ‎fancy shape polished. Rough trading is stable. ‎

India: Local polished trading remains weak as the strike by Indian jewelers to protest the ‎proposed excise duty on jewelry has affected buying. The one-day suspension of trading ‎in Surat and Mumbai in support of the retail strike also impacted overall trading in the ‎diamond market. Liquidity is tight as a result of the stalled retail activity. There are few ‎foreign buyers in the market but they are restricting their purchases to fill current orders. ‎There is good demand for VS-SI and piqué stones but these goods are available only at a ‎certain price leading to some resistance from buyers. Buyers are also watchful due to ‎volatility in the rupee-dollar exchange rate. Rough trading remains steady, with better ‎activity for rough yielding polished of -11 sieve size, SI categories. There is sufficient ‎rough supply in the market as cutting activity remains below capacity. ‎

Wholesale businesses were closed during this past week’s solemn Qingming ‎‎(Tomb Sweeping) festival and retail activity was subdued. In general, wholesale and retail ‎trading is stable with some rising demand for 1.00-carat diamonds. While some retailers ‎are starting to build inventory again, most buyers remain cautious and significant price ‎differences exist with suppliers. ‎

Hong Kong:
Polished trading is stable even though substantial price differences exist ‎between dealers. There is good demand for dossier certificates for goods around 0.50 ‎carats and buyers are increasingly opting for SI clarity stones. There are high ‎expectations among retailers for the upcoming summer wedding season as many ‎couples consider it lucky to marry during the Year of the Dragon.    ‎

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