Rough markets overheating with polished prices firming rapidly. Indian sellers are holding back goods until they get replacement cost. Shortages developing due to strong Indian, Chinese and Far East buying, good trading ahead of next week’s Hong Kong show and rising demand from U.S. and European jewelry manufacturers. DTC June sight est. at $650M with about 12% price increase for better-quality rough. ALROSA’s 2Q sales +30% to $1.3B. Christie’s New York sells $11.7M (94% by lot) with oval, 46.51ct., E, VVS2 diamond selling for $4.2M ($91,000/ct). Caution: While current price levels appear sustainable, markets may be heading towards speculative bubble.

 

Global Markets

United States: There remains positive trading in the U.S. as dealers continue to come to terms with rising prices. Demand exists at the wholesale level and as large retailers continue to increase their inventories. Mid-priced and small-to-medium size retail businesses continue to exert caution in the market. Wholesale demand is focused on round, 0.50-carat to 1.50-carat, I+, SI+ goods, to satisfy the engagement ring market, which continues to drive the bulk of consumer activity.

Belgium: There has been stable trading in Antwerp with demand driven by Far East buyers and large brand retailers. Demand from within Europe has been relatively quiet, which tends to be the case through the summer months, and as jewelry wholesalers work to supply existing orders before committing to buying at the higher prices prevalent in the market. There is strong demand for dossiers with shortages reported for G-H, VS-SI categories with Triple Ex cut.

Israel: Good trading was reported in the Israel Diamond Exchange (IDE) as dealers returned from the JCK Las Vegas show looking to fill orders and inventory, and as many prepared to travel to the June Hong Kong Jewellery & Gem Fair. Expectations are high that the show will signal a stable and sustainable market for the second half of the year. Many have been encouraged by the positive polished price trend and expect further increases down the line. Rough demand has been stable following the price hikes at the Diamond Trading Company (DTC), which largely impacted the better-quality goods that Israelis typically manufacture.

India: Polished trading improved as dealers returned from Las Vegas more confident about the market. Activity subsequently focused on preparing for next week’s Hong Kong show with many Indian buyers intending to attend to look for goods. There is strong demand for SI clarity stones in all categories, particularly for smaller goods up to 0.50-carat sizes. There remains good demand for 1.00-carat stones in all categories. Rough demand remains strong despite the recent price hikes. There are reports that rough inventories are growing as companies hold off on manufacturing in anticipation of further price increases.

China: Wholesale demand is stable although trading has been relatively quiet as the retail trade has cooled slightly in June. Many are attending the Jewelry Shanghai show, which started Thursday, viewing it as a strong networking opportunity. There are higher expectations for next week’s Hong Kong show. 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. The shortage in EX goods remains.

Hong Kong: The trade has been focused on preparing for next week’s show with many waiting to see if the uptrend in demand and prices will continue into the second half of the year. There are reported shortages of goods, particularly for 1.00-carat, D-F, SI stones.