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Market Comments 5/8/2014

May 8, 2014 6:00 PM  
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Polished markets stable as dealers prepare for Las Vegas shows. NY Diamond Dealers Club busy during Antwerp Diamond Week. Far East wholesale demand quiet despite robust jewelry sales during May Day holiday. Liquidity problems increasing in India. De Beers plans 5% annual price hike to meet Anglo American profit targets. Rough trading stable following small De Beers sight. April RapNet Diamond Index (RAPI™) for 1ct. -0.5%. Titan Company 4Q revenue +7% to $465M, profit +12% to $34M. U.S. March polished imports +1% to $2B, polished exports +26% to $1.9B. Antwerp Diamond Bank 2013 profit -31% to $7.9 million.

Fancies: Fancy shape market doing better with good demand for excellent shaped and larger polished sizes. Cutters are moving to fancy shapes because of significantly high rough prices for identical quality round diamonds. Curves (Pears, Ovals) are doing better than Squares (Emerald, Princess) in larger sizes with squares doing better in under the carat sizes. Increasing demand for 30-point Princess cut. Far East markets becoming more aware of fancy shapes. Buyers very selective regarding shape- and cut-quality with extreme price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and hard to sell even at very deep discounts.

Global Comments:

United States: Polished diamond demand is stable with dealers looking for goods in preparation for the Las Vegas shows scheduled to take place at the end of May. There was busy activity in the Diamond Dealers Club of New York during the Antwerp Diamond Week that took place there from May 5 to 8. While there were a lot of buyers at the event, demand was cautious and price sensitive. Suppliers showcased many color goods, particularly yellow diamonds. There is stable demand for dossiers with F-H, SI goods standing out as the best-selling categories. Retail jewelers were focused on Mother’s Day promotions although projections for diamond jewelry sales on the holiday are subdued. 

Belgium: The market is stable although it is lacking the same buzz from earlier in the year. Polished dealers expect the market to remain relatively quiet in the coming weeks and are waiting for the Las Vegas shows to boost activity. European demand is steady. There is good demand for 0.30-carat to 0.70-carat, F-H, VS-SI diamonds and improving demand for VVS-clarity goods below 1-carat. Manufacturers are concerned about rough prices as trading remains cautious on the secondary market. 

China: Sentiment has improved in the diamond and jewelry wholesale market as business has picked up following the May 1 holiday weekend, which is a busy retail selling period in China. Dealers expect some inventory replenishment following the holiday but not enough to significantly change the market dynamic. There is good demand for GIA-certified 0.30-carat to 0.50-carat, D-J, VS-SI diamonds. The retail jewelry market was relatively quiet following reports of robust gold and jewelry sales during the May Day holiday. 

Hong Kong: Diamond trading remains slow and sporadic during the many holidays that took place during April and May. Some note that the market has become overcrowded with suppliers while demand remains stable. Dealers have shifted toward buying parcels as they seek to avoid the grading delays at the GIA. Demand for large stones above 3 carats has softened and has become more specific than before. 

India: Polished trading is relatively slow as domestic demand remains sluggish. There are overseas buyers in the market but they are finding it difficult to get the goods they require. There are shortages in the market, particularly for GIA dossiers due to the slow turnaround time at the GIA. There is good demand for 1-carat, G-M, VS-SI goods, especially for the lower-color diamonds. Liquidity is tight among manufacturers as the banks are reviewing their credit terms, while high rough prices and the delay in bringing polished to the market are also contributing to the liquidity crunch. Rough trading is stable with relatively low premiums for better-quality rough during De Beers sight week.

Israel: Trading is slow with the bourse closed for Memorial and Independence Day holidays. The mood in the bourse remained relatively positive with steady activity, particularly among polished suppliers to the U.S. There are growing expectations for the Las Vegas shows with a large delegation of Israeli exhibitors participating. There is good demand for nice makes in fancy shapes. Rough trading is stable with steady demand for large rough. 

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