Diamond market in 2012 seen hit by economy


Diamond market in 2012 seen hit by economy

ANTWERP, January 31, 2012 – Rises in polished diamond prices may be unsustainable due to the fragile global economy, dealers at the January 29-31 Antwerp Diamond Trade Fair said.
They said European demand for polished diamonds was slow due to uncertainty among consumers because of the euro zone crisis.
For the U.S. market, however, they talked of signs of improving demand after an encouraging Christmas jewellery retail season.
Diamond market in 2012 seen hit by economy

Britain was a possible bright spot for diamond jewellery demand because of a likely increase in tourism later in the year linked to Queen Elizabeth’s diamond jubilee celebrations and the Olympics.
Certified polished diamond prices rose in 2011, spurred by strong buying in the first half of the year, but global economic uncertainties caused prices to soften in the latter half.
For 2011 as a whole, the Rapaport Group’s RapNet Diamond Index of prices for one-carat polished diamonds rose 19 percent.
While confidence has improved since January 1 following a period of relative price stability and a satisfactory U.S. holiday season, dealers were concerned whether current price levels are sustainable.
Ruud Biesbroeck of DHV, reflecting the views of other dealers at the Antwerp fair, said he thought diamond prices could hold steady or ease in the first quarter, and recover later in the year.
The U.S. market outlook was a bright spot for 2012.
Diamond market in 2012 seen hit by economy
Dealers said they expected U.S. buyers to re-stock after the positive Christmas jewellery sales season.
Shreyash Shah of Antwerp-based Paras Gems said he anticipated buoyant demand for polished diamonds in the U.S., Chinese and Indian markets in 2012.
India appears set to be an increasingly important driver of polished diamond prices in 2012 as its middle and upper income consumers turn to diamonds to accompany gold in wedding sets.
Indian dealers said their sales of loose diamonds were slow because retailers had stocked up months earlier and not sold as many finished pieces as they had hoped, reducing the need to re-stock now.
The mood was cautious also because jewellers were concerned about the impact of a weak rupee in a dollar-priced market.
Strong Chinese demand for diamonds, supported by rising incomes in the world’s most populous nation, was again set to drive prices in 2012, dealers said.
Chinese buyers were not out in force at the Antwerp fair, which caters mainly to European and Middle Eastern buyers, but the outlook for Chinese demand will become clearer during the HKTDC Hong Kong International Jewellery Show taking place from February 16 to 20.
Diamond market in 2012 seen hit by economy
The main weak spot in terms of demand for polished jewellery was Europe, notably Italy, which has been hard hit by the euro zone crisis, diamond dealers said.
DHV’s Biesbroeck said German demand for polished diamonds had held up relatively well, but his German clients had told him that many of his sales to German buyers were destined for clients from Eastern Europe rather than Germany.
Buyers were active from leading UK brands Boodles, Laings of Glasgow, and David Marshall.
Stuart Laing, managing director of Laings of Glasgow, said he expected diamond jewellery sales in the UK to hold up in 2012, even as consumers fear recession.
While volumes are down because prices of precious materials have risen, the value of sales is likely to hold fairly steady, he said.



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