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Market Comments 8/22/2013

Aug 22, 2013 6:00 PM  
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Diamond markets very cautious with high hopes for Hong Kong show. Chinese buyers moving to memo with increasing demand for lower qualities at competitive price points. Domestic Indian market stalls and in shock as rupee plummets to historic low of 65.5/$1. Israel Diamond Week attracts global buyers and rough auctions from De Beers, ALROSA, and Rio Tinto. Japan’s polished diamond imports -18% to $75M. Bill Farmer Jr. elected chairman of Jewelers of America.

Fancies: Fancy shape markets under pressure with weak demand in India and China. Lower prices for rounds also creating competition as relative value benefit for fancies decreases. Stable and healthy U.S. market supporting demand and price levels for a broad range of fancies in mid to low price ranges. Buyers very selective regarding shape- and cut-quality with extreme price differentials between excellent and average cut fancy shapes.

Global Markets

United States: U.S. diamond demand is stable as dealers concentrate on filling orders, and there is very little buying to build inventory. A contingent of suppliers and buyers are traveling to Israel for the U.S. & International Diamond Week taking place in Ramat Gan. The major retail jewelers continue to look for stable supplies for their programs, while independents begin assessing needs for the Christmas season. There are some concerns whether there will be sufficient supply of the bread-and-butter 0.30-1.25 carat, I-, SI- goods that are in steady demand. At the retail level, bridal sales are steady and helping drive the overall market.

Belgium: Trading in Antwerp remains quiet with many businesses taking extended vacations even though bourse services resumed this past week. Dealers note steady demand for smaller, certified goods with 0.30-0.50 carat, VS-SI goods being the strongest category. Rough trading is stable but quiet with dealers waiting to assess developments at the De Beers sight and other tenders scheduled to take place next week.

: Wholesale trading improved slightly following the quiet of the past few weeks. Still, very few companies are buying large quantities to refill inventory. Suppliers are hoping the market will continue to improve as retailers prepare for the October 1 holiday. However, buyers are prepared to wait until the Hong Kong show to gain greater clarity regarding price trends. There is stable demand for certified 1 carat, D-H, VS2-SI1 diamonds with suppliers trying to push prices higher as the market improves.

Hong Kong: Trading is cautious as buyers remain uncertain whether the market will continue to be weak through the September show. Buyers are purchasing only to fulfill immediate demand and are concerned that prices might drop further in the coming weeks. There is good demand for 0.30-0.50 carat, VS-SI diamonds while the market for 0.60-0.90 carat diamonds is sluggish. Demand for larger diamonds above 2 carats is also relatively weak. 

India: The rupee depreciation continues to weigh on domestic diamond and jewelry demand after the currency fell to historic lows again this week. Retail jewelers are under additional pressure from rising gold prices and gold import duties. Therefore, the positive market sentiment felt by jewelers at the recent India International Jewellery Show (IIJS) has not continued, and there are fewer than expected follow-up orders. The weak sentiment has filtered to the diamond market with domestic buyers still cautious. There is a steady presence of foreign buyers looking for goods in Mumbai and diamond exports remain relatively strong. There is good demand for dossiers, particularly 0.30-0.50 carat, I-, VS-SI goods. Rough trading is stable. 

Israel: Sentiment has improved in Ramat Gan as a large contingent of foreign buyers is expected to arrive for next week’s U.S. & International Diamond Week. Dealers also note improved polished demand and are hoping the momentum will continue into the fourth quarter. There is good demand for certified 0.30-0.50 carat, SI diamonds with some reports of shortages in these goods. Demand for better quality round diamonds remains relatively weak. Rough trading is steady with dealers eyeing prices at the numerous auctions taking place next week.
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