Far East demand exceeds expectations; smaller stones hot property.
The latest diamond market report from Rapaport has described improved market confidence in Q1, with last month’s Hong Kong Jewellery Show exceeding expectations as Chinese and Indian buyers become more active.
The report states that diamonds between 0.30ct and 0.40ct, G to K colour, VS2 to SI2 were "hot" in March, with prices for these smaller stones continuing to outpace other stone categories. Interest in smallers goods was largely driven by the Far East market.
According to Rapaport demand is steady for medium to low quality VS to SI goods through to two carats in size, with triple EX certified stones are in strong demand and short supply.
De Beers increased its prices at its March sight, reducing the quality of its box assortments. It also raised prices at its April sight by 3% to 8%. Prices at various tenders rose by about 4% in March. Supply was said to be restrained as De Beers sightholder applications declined 20% from last year in Q1, though five De Beers sightholders were added on April 1.
Passover and the Easter break cooled the rising price of rough diamonds and slowed trading at the end of March, however diamond demand in the US and Far East remains steady, with attention turning to the rough market.
Indian and Israeli rough demand has also improved, with Indian manufacturing expected to rise in the new fiscal year, which began April 1.
In the US, Rapaport described jewellery retail sales as "steady" as consumer confidence continues to rise, with Signet’s recent end-of-year and Q4 report outlining sold results for its US division.
A statement from Rapaport read: "Rough prices are not sustainable at the current level of polished demand. Responsible diamond manufacturers, rough dealers and their banks should refrain from supporting risky speculative rough buying."