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Average Start to Hong Kong Show
Sep 20, 2012 7:01 AM
By Avi Krawitz
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RAPAPORT... Polished diamond suppliers reported average sales on the first two days of the Hong Kong Jewellery & Gem Fair, which opened on Wednesday. After a quiet first day, trading improved on Thursday with buyers focused on specific, commercial-quality goods.
“There is business and I am satisfied,” said one Israeli exhibitor who requested anonymity. “Prices are holding here and there.”
Tony Mehta, owner of Diasqua Group, noted that buyers have been shopping around to get a sense of price levels. But he also observed that many returned to his booth to buy, indicating that prices are holding firm -- at least in the popular items.
Mehta noted that G-I color, SI and lower clarity goods have been strong and prices for these goods have held relatively steady so far. Darshan Bhagat, chairman of China Diamond Corp., added that I color and lower and collection color, VS2-SI2 clarity goods have been strong in all sizes, while better-quality IF-VS remain difficult to sell.
“The Chinese used to buy everything but now they’re more specific and looking for VS-SI goods because that’s where they get better value,” Bhagat said. “It’s not that there’s no demand for better quality [IF-VVS] goods, but they’re just too expensive.”
He noted that suppliers are holding large inventories of VVS+ goods, while there are shortages of supplies in the VS2- categories. Others echoed his sentiment. Mehta explained that shortages have developed due to manufacturers reducing their levels in the past few months due to the high cost of rough.
Kantilal Javeri, of J.K. Gems, estimated that diamond manufacturers have cut capacity by as much as 50 percent. He observed that prices for larger stones above 3 carats was softening slightly, while 1 carat to 2 carat, H-, VS-SI goods were holding firm. Demand for smaller goods, below 0.15-carat, has improved although buyers were resisting seller’s attempts to raise prices in these items.
Javeri concluded that there is currently sufficient supplies of polished diamonds in the market given that trading during the past two months has been slow. However, he forecast a pending shortage in the coming months due to the slowdown in manufacturing and as the fourth quarter selling season begins.
Mehta explained that Chinese buyers have been largely absent from the market in the past three months and they, therefore, now need to start buying again.
As a result, many noted that the timing of the show was good as it gave wholesalers the opportunity to buy and prepare their jewelry inventory in time for the holiday season. One Belgium-based manufacturer and dealer, who requested anonymity, surmised that the show has become less of an indicator of the season’s prospects in recent years, especially as it is too close to the October 1, National Holiday Golden Week, which is the biggest retail season in China before the Chinese New Year in February.
Others noted that the show’s timing was also good as the economic outlook has improved in the past week after the U.S. Federal Reserve announced another possible round of quantitative easing.
“The Far East has been slow because people had in mind that the market had come down and the global economy was also in the decline,” explained one trader. “But hopefully QE3 will bring some liquidity back to the U.S., and stimulate consumer demand.”
The show is split between two venues with exhibitors of diamonds, pearls, colored gemstones and equipment and packaging products presenting at the AsiaWorld-Expo from September 19 to 23, and fine finished jewelry exhibitors displaying at the Hong Kong Convention and Exhibition Centre from September 21 to 24.
Show organizers reported that more than 3,520 exhibitors from 48 countries are participating in the fair with more than 51,000 buyers expected to attend.
Many Israeli and Jewish Belgian exhibitors missed the first day of the show, delaying their travel due to the Jewish New Year, while some Indian traders were absent on Wednesday due to the Jain festival of Paryushan.
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Tags:
Avi Krawitz, diamonds, Hong Kong Jewellery & Gem Fair, Rapaport
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