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Market Comments 6/10/2011

Jun 10, 2011 9:00 AM  
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JCK Las Vegas Show well attended with good atmosphere. Seller’s market prevails. U.S. retailers begin to pay higher prices as Far East competition for scarce goods heats up. Harry Winston 1Q sales +26% to $143.9m, net profit +24% to $3.6m. De Beers Diamdel unit to open Dubai office. Christie’s London sale garners $12m (74% sold by lot). U.S. April polished exports +27% to $1.7b, polished exports +35% to $1.3b. Belgium’s May polished exports +51% to $1.4b, rough imports +99% to $1.4b. 

Global Markets

United States: Positive reports from the JCK Las Vegas show added confidence to the market. Polished buyers appear to have accepted that they need to pay higher prices if they want to secure the necessary goods as sellers are able to achieve their asking price levels from Far East buyers. Reports indicate that U.S. buyers focused on 0.5-carat to 1.50-carat stones at the show while international buyers accounted for a majority of the larger-stone purchases, 3.00-carat to 5.00-carat goods. There has been a slight shift among designers toward using silver and colored gemstones in their jewelry designs to offset the rise in diamond, gold and platinum prices.

Trading in Antwerp is stable but quiet as many dealers were in Las Vegas and many Jewish businesses closed on Wednesday and Thursday for the Shavuot holiday. There continues to be a positive mood within the trade and sellers remain in the driving seat as the polished price uptrend continues. There is continued concern about rising rough prices ahead of next week’s Diamond Treading Company (DTC) sight.

Relatively quiet trading in the Israel Diamond Exchange (IDE) due to the shorter working week over the Shavuot holiday. Many who traveled to the JCK Las Vegas show returned with positive reports with good sales at fair prices achieved, even if they did not exceed expectations. Many are looking forward to the Hong Kong show later in the month (June 23-26) as a better gauge on polished price and demand trends. 

Polished trading improved as dealers returned in positive mood from the JCK Las Vegas show. Demand is upbeat as shortages remain for certified goods. There is overall strong demand for SI clarity stones, with stable demand for the smaller mainstay Indian goods: -2, star and melee in SI-to-pique clarities. There is very good demand for 1.00-carat stones in all categories with shortages reported in the lower color items. Rough trading has improved with some anticipation for an increase in Diamond Trading Company (DTC) boxes at next week’s sight.

Trading is stable with shortages of double Ex and Triple Ex fine-cut diamonds. There was steady buying by Chinese visitors to the JCK Las Vegas show eager to fill those shortages prevailing in the market. There is rising anticipation for the Hong Kong show later in June as an opportunity to source additional goods. There is good demand for 0.30-carat to 1.10-carat, D-H, VS-SI, GIA-certified stones with increasing flexibility among buyers to broaden their range of purchases.

Hong Kong:
Dealers were encouraged by trading that took place at JCK Las Vegas and indications that U.S. buyers are beginning to pay higher prices seen in the Far East. Many are hoping that this may signal strong trading ahead of the upcoming Hong Kong June show, which is gaining in importance but is still not on the scale of March and September events, and through the relatively slow summer months. Carat sizes remain the mainstay items with demand focused on VS-SI clarities in all colors.
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