The wholesale diamond industry during the Passover holidays activity in the trading centers slowed considerably in Belgium and Israel following the Basel Diamond Trade Show. Tougher bank lending credit conditions have led to liquidity issues as the cutting centers have tightened as a result. Furthermore, high rough prices and continued delays at the Gemological Institute of America have contributed to the sluggish trade atmosphere. Many suspect that wholesale diamond industry insiders and retail jewelers had already replenished their inventories that were depleted during the Christmas shopping season as well as during the Chinese New Year festivities.
The Rapaport Diamond Index during the period of April 1 to the 21st one carat certified and polished diamonds fell 0.5 percent. The RAPI for .30 carat diamonds also declined 1.3 percent during the period, and .50 carat diamonds decreased 0.9 percent. Three carat diamonds also fell 0.6 based percent during the period. Analysts suggest that these declines during the April month were due to the strong uptrend of diamond prices early in 2014. During the Hong Kong Diamond Trade Show, positive momentum trickled down to the market. However, by selective demand for fine me diamond goods. Nevertheless, sentiment in wholesale diamond industry has remained relatively upbeat compared to last year, particularly due to the fact that Hong Kong has rebounded from the recession.
The Wholesale Diamond Industry and Honk Kong
Recently published data by the Diamond Federation of Hong Kong, China Ltd. showed that polished imports to the island of Hong Kong rose 11 percent year over year to $4.39 billion in the fourth quarter of 2013, and this is while polished exports increased a whopping 18 percent to $3.29 billion. It is of importance to note that net polished imports, representing the excess of imports over exports, fell 7 percent $1.1 billion during the quarter. Data suggests that growth in revenue was driven by price increases as the volume of polished imports and exports through Hong Kong fell during the fourth quarter. Nevertheless, the polished diamond trade in Hong Kong was substantially stronger in 2013 than that of 2012. This trend is expected increase further during the first quarter of 2014.
Rough Diamond Prices Increase
Run-up diamond prices have increased as price sensitive cutters try to raise polished prices. This comes after rough prices rose during the month of April 2014. The De Beers conglomerate raised its prices by 3 percent to 4 percent during its April auction. Individual diamond box assortments were left unchanged. Diamond miner, ALROSA reportedly Its prices stable during its April trading session, having adjusted its prices during March. Data suggests that rough prices had increased anywhere from 7 to 10 percent in 2014. One company, Dominion Diamond Corp. reported that rough prices increased approximately 7 percent since the reunion the year. However, ALROSA reports that rough prices only rose by 4 percent. During the months of March 2014 through April 2014, the De Beers reportedly had sold $700 million.
Wholesale Diamond Industry and Rio Tinto
During the first quarter of the 2014 year, there were strong, rough diamond sales. The result being that dealers today are aware that there is not a bountiful supply of high-quality diamond material. This is because the wholesale diamond industry pipeline is almost exhausted. Mining companies have increased their production. ALROSA's production rose six based percent annually to 7.9 million carats in the very first quarter of the year, selling 12.7 million carats of diamonds during the time. Approximately 9.5 million carats were of gem quality diamonds, in other words, these are not industrial quality diamonds.
Diamond giant Rio Tinto production rose some 13% to 3.7 million carats of diamonds during the same quarter. De Beers first quarter production rose 18 case percent to 7.531 million carats of diamonds. There is a higher volume of rough diamond coming into the market and simultaneously a decrease in the manufacturing process. Likely the prices of rough diamonds are to remain stable in the short to medium term. Many diamond dealers are expecting activity to slow down. This is because traditionally the second and third quarters are quiet with regards to selling. The result being liquidity is to remain tight among diamond manufacturers.
Wholesale Diamond Industry production is responsible for annual diamond sales.
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Wholesale Diamond Industry production is responsible for annual diamond sales.