The Hong Kong Jewellery & Gem Fair concluded Monday, with diamond traders relatively optimistic in the face of a cautious outlook for the upcoming holiday season.
Demand in the Far East remains weak amid slower economic growth in Mainland China and a fall in tourist arrivals in Hong Kong, according to most exhibitors.
“Hong Kong is slow because tourism is down and the economy is cautious. In China, things are growing at a slower pace,” said a Hong Kong-based jewelry wholesaler. “People are more conservative in stocking goods.”
Traffic at the finished jewelry section of the show was light on the opening day, picking up over the weekend. Among loose diamond dealers, sentiment was relatively positive as the show represented an opportunity to sell after a long period of inactivity and a sluggish summer. Even as retailers and dealers are holding less stock than before, people haven’t bought for so long that they now need goods, exhibitors said.
The slightly better mood came as market conditions improved from 2015, which was decidedly difficult amid a slump in demand, according to Laurence Ma, president of the Diamond Federation of Hong Kong, China.
“The diamond market has stabilized this year,” Ma said. “Since the beginning of the year, the price of polished diamonds has been steady. Demand and supply are very much in balance. Inventory has been reduces at different levels. It’s a lot healthier.”
Diamonds are selling in specific categories, mostly in sizes 0.20 carats to 2 carats, dealers said. Melee is weak because of lower demand and increased concern about undisclosed synthetics entering the supply chain, while stones above 2 carats remain hard to move.
“People are not discounting polished,” said an India-based supplier. “It’s not about prices – it’s about how I differentiate myself.”
Two jewelry suppliers who spoke to Rapaport News said they were producing pieces that retail at lower price points in response to tighter spending habits in the Far East. For instance, the Hong Kong-based Brilliant Diamond Jewellery Manufacturer Limited is making more products with smaller diamonds and lighter gold weight to satisfy shifts in Far East demand.
“If Hong Kong retail is down, it affects us directly,” said Jerrica Chua, a sales manager at Brilliant, which supplies to China, the Middle East and Europe. The quality is unchanged, with its diamond jewelry still containing SI, G-H goods as the typical center stone, she added.
Show participants observed increased concern among consumers and retailers about lab-grown diamonds being mistaken for natural stones and stressed the importance of differentiation and transparency. Show organizers UBM Asia launched a program enabling exhibitors to display a certificate verifying that diamonds in their booths are natural.
UBM Asia did not directly vet participants, Wolfram Diener, the company's senior vice president, told Rapaport News. Rather, recipients obtained the certificate by virtue of being members of a natural diamond trade body, including the Antwerp World Diamond Centre, the Israel Diamond Institute and the Diamond Federation of Hong Kong, China.