The March Hong Kong show closed on Monday with dealers disappointed in the number of buyers that attended, even as they remain satisfied with the recent improvement in Far East demand.
“Sentiment is positive, and buyers adapted to higher price levels that emerged in the past few months,” said one Israel-based diamantaire who requested anonymity. Many noted that trading before the show was better than during the event as wholesalers and retailers needed stock for the Chinese New Year, which started on February 16.
Diamond exhibitors therefore came to the show with high expectations after recording good sales from November through February. Polished diamond prices firmed, with the RapNet Diamond Index (RAPI™) for 1-carat diamonds rising 2.9% in the first two months of 2018.
However, participants’ hopes diminished following low buyer turnout from mainland China. Chinese clients were still on vacation as the show was too close to the New Year Lunar festival, dealers noted.
There was a steady presence of Far East buyers from Singapore, South Korea, Japan and Australia, as well as from India and the US. Visitors were pushing for lower prices, but realized that suppliers were holding firm, noted Vincent Yiu, a manager at Hong Kong-based diamond manufacturer Brilliant Trading Company. Local buyers also didn’t feel the price increases as much as they might have done, given that the dollar weakened in the past few months, he added.
The US dollar has depreciated 4% versus the Chinese yuan since the beginning of the year, making dollar-denominated purchases cheaper for local buyers.
Still, there wasn’t an overall rush from jewelers to build up inventory, and much of the trading in the diamond hall at AsiaWorld-Expo was driven by dealer demand.
The following trends emerged in dealers’ discussions with Rapaport News:
GIA dossiers doing well in VS- to SI-clarity goods.
Steady interest in 0.30- to 1-carat, G- to M-color, VS to SI diamonds.
Big stones relatively slow.
D to F, VVS also quiet.
Shortages in 5- to 10-carat, I to K, VS2 to SI1 diamonds.
Shortage of 2-carat and larger, I to K, VVS to VS goods.
Chinese buyers continue shift to SI-clarity goods, resulting in shortage of nice, triple-EX, no-fluorescence diamonds in that category.
Good profit margins on old polished. New supply less profitable due to higher rough prices.
Indian suppliers concerned about future available bank credit, following $2 billion Nirav Modi-Gitanjali fraud allegations.
More diamond manufacturers developing capability to support traceability and provenance claims, with varying success and understanding of blockchain technology.
The Hong Kong International Diamond, Gem & Pearl Show ran at AsiaWorld-Expo from February 27 to March 3, while the Hong Kong International Jewellery Show was at the Hong Kong Convention and Exhibition Centre from March 1 to 5.