Market Comments 7/18/2013 China Quiet, U.S. Holding Markets Up Chinese market cold and quiet with very little inventory demand and increasing memo availability from India. U.S. market good with May jewelry store sales +8% to $3B. Large $600M De Beers sight with price hike poorly timed and challenging the market. De Beers 2Q production +10% to 7.9M cts. Rio Tinto production +47% to 4.1M cts. Dominion’s Ekati and Diavik 2Q production at 1M cts. Okavango sells 123K cts for $20M ($163/ct.) at pilot auction. India’s June polished exports +22% to $1.5B, polished imports +150% to $695M, rough imports +15% to $1.4B. Belgium’s polished exports +3% to $1.4B, rough imports +17% to $1.1B. Mark Cutifani, CEO of Anglo American, named chairman of De Beers. Fancies: Fancy shape markets coming under pressure as economic uncertainty in India and China reduces prices. 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-price ranges. Buyers becoming more picky with extreme price differentials between excellent and average cut fancy shapes. Global Markets United States: Trading in New York is relatively slow with many wholesalers on vacation in July. However, the mood remains comparatively positive due to steady consumer demand so far in 2013, supported by the May jewelry store sales data reported this week in outperforming the general retail market. There is steady demand for lower-quality, commercial SI clarity diamonds. While retailers are maintaining low inventories for now, they are sensing that good buying opportunities may develop as suppliers in overseas centers come under pressure to sell. Belgium: Sentiment in Antwerp is cautious as Indian trading has softened due to the volatile rupee. Dealers are basically resigned to vacation mode ahead of the August summer holiday period with low expectations for the trade in the current third quarter. There is steady demand for certified VS-SI goods, while demand for VVS and better clarity diamonds remains weak. Demand for fancy shapes has also slowed slightly in the past month. Rough dealers have been eyeing the De Beers and ALROSA sales this week, expecting a higher volume of goods in the market. China: Wholesale and retail demand remains quiet with no major festivals currently to boost consumer spending. Dealers are cautious, despite the relatively positive second quarter retail sales data reported by China’s government this week although economic growth remains conservative. Diamond buying is therefore cautious as buyers are content to sell off existing inventory and order new goods on consignment. There is steady demand for GIA-certified round, 0.50-0.70 carat, D-H, VS2-SI2 goods while demand for VVS diamonds remains weak. Hong Kong: Trading is quiet due to slow seasonal demand from retail buyers and overall caution in Asian markets. There is good demand from China for certified 0.30-1 carat, G-I, VVS2-SI with buyers willing to spend a little more to get the right diamond. The strongest demand is seen for 0.30-0.89 carat, VS-SI diamonds. Demand for other goods is weak with no real urgency to buy resulting in general price resistance from buyers. India: Trading in Mumbai and Surat remains bleak and marred by the weak and volatile rupee, high rough prices, and tight liquidity. The industry continues to lobby against unfavorable government policy with limited success. The larger polished exporters report steady orders, particularly from the U.S. while Chinese demand is relatively slow. Polished suppliers are hoping the market will stabilize before the upcoming IIJS Mumbai show (August 8-12) while buyers sense that suppliers may be under pressure to sell and reduce prices to boost their cash flow. Rough trading was slow during sight week and as manufacturing remains below capacity. Israel: Trading is quiet with U.S. wholesalers on vacation and due to restrained demand from other markets. Israeli dealers are looking for bargains, trying to take advantage of the weak Indian market, and prices have softened for lower quality, SI- goods. Still, inter-dealer trading in the bourse is slow and prices are relatively firm. Rough trading is quiet following reports of higher prices at the De Beers and ALROSA sights respectively.
Posted on: Fri, 19 Jul 2013 17:56:22 +0000
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