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Market Comments 6/11/2015

Jun 11, 2015 6:00 PM  
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Diamond trading activity slow. Polished prices coming under pressure due to continued sluggish demand. Some improvement in caraters with good U.S. demand. Better-quality 30s-40s weak as Chinese demand remains soft amid concerns that some Chinese firms are not making payments. RAPI May 0.30 ct. -1%, 1ct. +0.3%. Big stone supply and prices tight, demand spotty, sales weak. De Beers raises some prices and improves assortments. Chow Tai Fook’s FY revenue -17% to $8.3B, profit -26% to $714M. Dominion Diamond Corp 1Q sales +7% to $187.7M, profit -48% to $7.7M.

Fancies: Ovals and Cushions steady, Pears and Princess improving, Hearts slow. Prices for curves improving slightly. U.S. demand supporting market for commercial-quality fancies, especially for sizes under the carat. Larger sizes softening. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.
 
Global Comments

United States: There is activity in the market with wholesale buyers looking for goods. Dealers are optimistic following the JCK Las Vegas show, despite lower sales than last year. Buyers are still price-sensitive and filling order-specific demand. Most goods are being sold on memo. There is good demand for 1-carat to 2-carat, G-I, VS-SI diamonds. Major retailers are reporting that a relatively strong dollar is encouraging U.S. consumers to buy, while shopping by foreign tourists is down. Bridal sales are steady.

Belgium: Trading has improved in Antwerp and sentiment is more positive than before the JCK Las Vegas show. Large diamantaires reported positive sales in Las Vegas. Some local diamiantaires are nervous about liquidity issues among Far East buyers. Deals are being driven by supply shortages in specific categories. There is good demand for 1-carat, F-H, SI diamonds, triple EX goods. Demand for most fancy shapes is slow. Manufacturers are still complaining that rough prices are too high.

Hong Kong: The market remains quiet but stable. Demand from local retailers has not picked up amid a weak economy and lower tourist traffic from Chinese tourists. Commercial-quality goods are moving. There is steady demand for 1-carat, I-K, VS-SI diamonds, and weak Far East demand for 0.30-carat to 0.40-carat goods. Some foreign diamantaires are worried about possible defaults by Chinese buyers. Expectations are relatively low for the upcoming June Hong Kong show.

India: Overall trading is weak in Mumbai. Large local manufacturers were satisfied with the Las Vegas show reporting steady demand from major jewelry customers. Smaller suppliers had a mixed show. Demand is weak for 0.30-carat to 0.40-carat diamonds. There is good demand for 1-carat to 1.50-carat, D-H, VS-SI1, triple EX diamonds. There is stable demand for ovals and pears, but most square shapes are moving slowly. Rough prices are stable, but cutters still complain that rough is too expensive to manufacture at a profit. Polished factories are running at significantly reduced capacity.

Israel: Sentiment is weak in Ramat Gan. Many local dealers and manufacturers say that the JCK Las Vegas show met their low expectations, but no more. Fewer sales occurred at the show than last year, and diamantaires had hoped for stronger buyer attendance. Local demand is soft for diamonds larger than 3 carats. There is steady demand for 1-carat to 2-carat, F-H, VS-SI goods. Polished manufacturing is well below capacity.


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