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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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