Global Diamond Demand

RAPAPORT…

Antwerp

• Everything is selling well in nice makes in D-I, clean to VS2, from 5 points to 2 carats. Prices went up between 3 and 5 percent in July from previous month.
• Generally speaking, something of a slowdown is occurring in the 3-caraters+ range across the board. However, prices haven’t gone down. Reason could be that even though demand is a little weaker, people know that rough prices are increasing so buyers are delaying purchases until they have a real request.

China
• The market is seasonally quiet but stable.
• Demand is stable for rounds in 0.30 to 0.70 carat G+/VS+.
• Demand is strong for round G+, VS, ½-carat fine-make diamonds with Gemological Institute of America (GIA) certificates, especially triple EX goods.
• Demand is stable for larger, round stones in 1 carat+/VS+/H+, GIA-certified and fine make.

Hong Kong
• There is general apprehension in investing in large, expensive stones for fear prices might soften. The exceptions are G-I colors in VVS clarities.
• Fancy cuts are being sought as cheaper alternatives to rounds. Marquise, hearts and princess cuts are preferred.
• While there is steady demand for triple EX goods, buyers are increasingly comfortable buying slightly off makes or goods with medium fluorescence if discounts are larger.
• G-I colors in VVS clarities in all sizes continue to be in very strong demand, as reflected by a shortage in supply.

India
• Activities were mixed in July, with the overall market a bit slow. There were few financial failures in the local market but the news that two brokers had fled with goods made the overall market cautious.
• Prices remained strong through July for polished goods across the board due to the rough price hike by DTC.
• Diamond cutters in India were on strike for most of July, demanding — and winning — an increase in their wages. The strike stopped production in the cutting centers of Surat and Gujarat.
• The liquidity crunch persists in the local market.

Israel
• Trading is expected to be slow through the summer vacation in U.S. and Israel.
• Most trading is to fulfill existing orders as people don’t want inventory piling up during the summer.
• Demand is focused on good colors in D-F and VS2-and-above clarities.
• In fancy colors, there’s been a shift in demand toward intense and vivid grades. Light fancy colors are considered less desirable.

Japan
• After Rapaport raised prices on its list in May, the prices of 2-carat+ diamonds in VS-and-better qualities and high colors became very strong.
• The domestic market is unable to catch up with new prices.
• Darker-color stones, such as I-K, have also become strong.
• The lower end of SI2 qualities in 0.30, 0.50 and 0.70 carats is weak across the board, while SI1 remain strong.
• 0.20 to 0.25 carat in bridal items are strong.
• Fancy pinks of round brilliants are moving very well, and it is suspected they are being exported overseas.
• Well-made heart shapes are moving well. Radiants are slow.

Russia
• Russia exported 6.65 million carats of rough diamonds worth
$414.83 million in the first quarter of 2008, according to the country’s Ministry of Finance.
• Russia imported 65,500 carats worth $10.2 million.
• The largest importers of Russian rough were Belgium with $227.3 million, Great Britain with $78.1 million and Israel with $60.3 million.

U.S. Retail
• Round and princess cuts top engagement-stone sales, with marquise and emerald making strong showings.
• The most popular carat-weight averages 1.5 carats, but sales of larger stones are becoming more common.
• The most popular color is G, though F is a close second.
• SI1 is the best-selling clarity, followed by VS2.
• White gold is the most requested metal for settings, though palladium is gaining ground.
• $8,500 is the average price for an engagement ring, including stone and setting.

U.S. Wholesale
• Goods with GIA certificates are moving well.
• VVS diamonds are losing some ground to VS and SI.
• Rounds and princesses remain the two top sellers for this market.
• Demand for pears and ovals has increased slightly.
• Melee is meeting moderate demand.
• Large, high-quality goods continue to be very strong.