Reports on diamond industry news from the much awaited Hong Kong International Jewelry Trade Show are in. The fine diamond and jewelry trade show took place at the beginning of March was relatively successful in that it ensure a positive mood that has been a goal the diamond industry throughout the 2014 year. Polished diamond dealers were on exceptionally high alert for signs of stability in the Asian diamond and jewelry market. The jewelry trade show met diamond dealers expectations. However, it did leave much to be desired regards the sales as the market is not booming but has held steady. Diamond dealers were said to have held firm on their prices. Buyers at the jewelry trade show purchasing volume were seen similar to that of other trade shows throughout Asia recently.
GIA and the Jewelry Trade Show
There had been strong demand for certified diamonds graded by the Gemological Institute of America, also known as GIA. The Gemological Institute of America (GIA) is the foremost authority on gem and diamond grading. What makes GIA so unique is their classification criteria which are known to be strict. The result being a standard by which the diamond industry has built itself around. The Rapnet Diamond Index (RAPI) is a list in which diamonds categories and prices change with the market. The RapNet Diamond Index is a complicated list in which a consumer can misinterpret many things; each diamond is unique and can demand more or less than its speculative price.
Diamonds Increase
1 carat certified polished diamonds rose .7 percent during the March 1 to March 24, 2014. The RapNet Diamond Index for .30 carat diamonds increased 3.4 percent, while .50 carat diamonds rose only 1.3 percent; 3 carat diamonds increased 1 percent during the period. 1 carat diamonds increased by approximately 2.3 percent in the first quarter of 2014 after experiencing a downward trend in 2013. The Asian market is also requesting diamond parcels as well as noncertified goods in the .25 to .30 carat range as there is a significant shortage in high demand. The shortage of diamond material in the categories can is attributed to delays in GIA grading. GIA is at capacity with regards to grading diamonds. The approximate turnaround time for diamond grading at the GIA laboratories is about 50 days. GIA expects to see some reduction in their turnaround time for the second half of 2014.
Chinese Diamond Demand
The coveted Asian markets are active, however, they require the right diamond material at the right price. Chinese buyers for example are and extremely price-sensitive. Throughout the last year, the Chinese government has implemented reforms to segue their economy from a government investment driven market to a consumer-focused economy. With that said, many local wholesale jewelers and wholesale polished diamond dealers report these measures are necessary to ensure that growth is sustainable for the future. Goldman Sachs downgraded gross domestic product outlook for China. Expecting that the Chinese economy is in for a slowdown.
The bank lowered its 2014 forecast 7.6 percent to 7.3 percent citing a slowdown from the previous years of healthy double-digit growth. Economists at Goldman Sachs explain that key factors would provide positive support with regards to growth in the Chinese economy. The result of these efforts, suggests that there remains an environment of caution in China and Hong Kong's diamond and jewelry industry. Sales have remained relatively steady in the first quarter of the year. Data suggests that Asian consumers are more willing than their counterparts in the United States to pay the higher asking prices requested by diamond dealers and jewelers. The United States polished diamond demand is able however buyers routinely resist higher asking prices thus resulting in a slight slowdown in activity.
Increased Margins
Polished diamonds in bourses such as Mumbai and Ramat-Gan have held steady. This is even after the down trending period after the Hong Kong Diamond Jewelry Trade show. Thanks to De Beers decision not to raise its rough diamond prices many diamond and jewelry manufacturers and wholesalers enjoy improved profit margins. There was some speculation that De Beers would increase their rough diamond prices during March and April site tenders but did not do so. There are also reports circulating that rough prices below 5 carats increased slightly, while larger goods remained firm during this time period.
The company Gem Diamonds reported that the Letseng mine in Lesotho, will garner higher prices in the year of 2014. This phenomenon is partially due to the ship of production from the mine main pipeline higher grade. A higher value satellite pipe. Diamonds from the Letseng mine has increased 49 percent year-to-year. From $2533 per carat in the fourth quarter, to $2673 per carat at its first tender in 2014. Likewise, Petra Diamonds explained that the rough diamond market firmed up toward the end of 2013 and the company did well at its February 2014 diamond tender. The company's management team suggested that they expect the market conditions to hold steady throughout the first half of the year. Petra Diamonds referenced reports of increasing global economic confidence and the restocking of the diamond pipeline as the reason behind the optimistic environment.
What to Expect at a Jewelry Trade Show
With reports of liquidity issues in the diamond manufacturing centers improving. Many dealers suggest that the tightening of merchandise will come within a few more months. For example in India, liquidity has already begun to narrow. This being typical in advance of March 31, the end of the local fiscal year. Banks expect to tighten their lending to the diamond industry in the new financial year. Despite the improved trade in the first quarter, profit margins remain a challenge for diamond manufacturers.
Diamond manufacturers claim their margins have improved slightly but rough prices remain a step ahead of polished diamond prices. Both polished dealers and manufacturers have noted that polished prices need to increase considerably. And this should happen within the next three months in order to make a profit from the current rough stock. Many dealers are acting cautiously in managing their expectations. As well as the subsequent activity in the diamond bourses.
The world famous Hong Kong International Jewelry Trade Show
info@1800loosediamonds.com
The world famous Hong Kong International Jewelry Trade Show