Trading slow with buyers avoiding large purchases as diamond markets seek stable price levels. Rough continues to fall in dealer markets with elimination of premiums and some discounting of mining company prices. ALROSA sells $23M at Aug. tenders (90% by volume) with prices +5% over regular selling list. Large jewelers report strong growth in latest quarter: Tiffany sales +31% to $873M, profits +33% to $90M; Signet sales +11% to $798M, profits +71% to $66M; Zale sales +9% to $377M, loss of $33M vs. $29M a year ago. Best wishes “Michhami Dukkadam” to our Indian friends and “Eid Mubarak” to our Arab friends. Human Rights Watch reports ongoing abuse in Marange fields. Buyers Beware.
Global Markets
United States: Wholesale trading has further quieted as low consumer confidence, price uncertainties and the traditionally slow summer season combined to take their toll. Demand remains focused on stones suitable for the engagement and bridal market, with rounds, 0.50-carat to 1.99-carat, G-H, VS-SI goods leading the way. However, it appears difficult to sell these goods as buyers are resisting higher price points. Demand for larger goods above 3.00 carats remains weak. Retailers appear most concerned about economic trends ahead of the fourth-quarter selling season.
Belgium: Trading activity remains slow as price uncertainties and economic concerns persist. In addition, many Antwerp-based Indian dealers were still on holiday through this week’s Jain festival. There is demand for polished as sellers are offering less for their goods while buyers are holding back until price stability sets in. Rough trading is slow with price declines more apparent in the secondary market than at the mining company source.
Israel: Trading has slowed as dealers are cautious but are hoping for price stability ahead of the Hong Kong show, which starts on September 19. Despite the uncertain outlook for the show, there is a strong emphasis on further penetrating the Far East market where the strongest growth opportunities lie. At the same time, sellers appear willing to compromise on price, even at the expense of incurring a slight loss, in order to maintain partnerships with their strong retail partners. Rough dealers are pushing for greater discounts.
India: Activity in both the polished and rough markets has been restrained due to the ongoing Jain religious festival of Paryushan, one of India’s major holidays. Polished buyers are not in a hurry to purchase as they expect prices could fall still further and overall demand remains poor as a result. Tight liquidity issues continue to hurt traders’ confidence. Sentiment in the rough market also remains weak. However, limited trading is taking place as some Diamond Trading Company (DTC) boxes are selling at discounts.
China: Polished dealers are cautious about buying large volume of new goods until prices stabilize. Rather, they appear focused on selling existing inventories to keep cash flows moving. Still, buying activity this week has increased slightly from last week as buyers have begun preparations for the National Day Golden Week holiday, which starts on October 1. Retailers are expected to increase their buying to fill their inventories in the coming weeks.
Hong Kong: Trading is slower than expected for this time of year, which generally involves early buying for China’s Golden Week celebrations. Wholesalers appear unsettled by the recent downtrend in prices and buyers are holding back until they see signs of greater stability in the market. There is some concern that the slow trading will extend through the Hong Kong show, which may impact the winter trading season.
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