Industry Analysis: Asian Trade Shows Report Good Traffic, Price Resistance

This article is published courtesy of  Gemological Institute of America
Author: Russell Shor,   Senior Industry Analyst
Intellectual property: GIA
Reports from trade shows in Bangkok (Feb. 26-March 2) and Hong Kong (March 5-9) were generally positive, citing strong traffic. Price resistance for diamonds and colored gems was also quite strong. By the close of the latter show, however, buyers accepted diamond prices that were some 20% above last year’s show. This gives some relief to manufacturers squeezed between rising rough prices and static prices for polished goods.
 
In Hong Kong, Alrosa, the agency that markets Russia’s diamond production, held a tender auction of 145 polished stones — several of more than 10 carats — that was expected to total $8 million.
 
At the Jewelers of America Show in New York (Feb. 28-March 2), exhibitors reported light traffic. Serious buyers did show up, but they were cautious and bought primarily to replenish post-holiday season inventories.
 
DIAMONDS: The speculative spikes in rough diamond prices appear to have eased following sales of some $2 billion worth of goods into the market during the first two months of this year. The 7% to 9% price increases that the De Beers Diamond Trading Company imposed in February were also quickly absorbed. Secondary sellers, however, did not tack on their own increases as they had for the previous nine months.
 
This, plus steadily recovering demand and firming prices for polished diamonds, has given the diamond industry hope that rough and polished markets are stabilizing.
 
Rough prices are higher now than they were before the economic crisis; the increases stem from renewed credit lines, particularly in India, and perceived shortages of rough. Last year, rough sales totaled $5.5 billion to $6 billion, half of 2008 levels.
 
COLORED GEMS: Gem Fields, the London-based colored stone mining company, intends to take its time in evaluating the 6,225 ct emerald its Zambian operation unearthed last month. The company’s chief executive did say, however, that preliminary indications are that “it should yield a number of cut gems of significant size.”
 
MACRO: Favorable weather and improving consumer sentiment helped push chain store sales to their largest gain since July 2007. Sales rose 3.4% the first week in March over the corresponding week last year, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. Major store sales for the first week of March were also up 2.9% from the previous week.
 
Michael Niemira, ICSC’s director of research and chief economist, predicted that with this strong start, March sales would increase by 2.5% to 3.5%.
 
— Russell Shor
    Senior Industry Analyst
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2 thoughts on “Industry Analysis: Asian Trade Shows Report Good Traffic, Price Resistance

  1. It was a good news about HK show. All exhibitors and customer were pleased and successfully after 08 and 09.
    and I’ve heard they eagerly like to attend in Sep. to Jewelry show in HK again…..
    in the mean while I would like to say thanks for sending
    and posting the latest news regarding Gem and Jewelry
    and Diamonds.
    Best Regards
    Zo amini

  2. Thank You Zo for commenting and for following Gemma News Service. We really appreciate your suggestions and your comments.

    Best Regards
    Raul

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