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Weekly Market Report

DIAMOND MARKET REVIEW

Traders reported modest activity ahead of the Hong Kong Trade show this past week. The underlying mood remains cautious. Polished prices have been under pressure for some time, as the market grapples with high inventories in the cutting centres and sluggish polished demand.  All eyes are on the demand situation at the Hong Kong diamond and jewellery trade show. In the broader market,the main polishedprices index ended the week 118.21, opening at xx on Friday, from Monday’s opening at 118.17.

ROUGH MARKET

Most sightholders showed restraint at Beers sight this past week. “The sight was very quiet, there is no appetite,” one sightholder said. Demand in the secondary market has reportedly taken a tumble. “There is no demand, only at serious losses for sightholders,” one said.  According to some in the trade the weakness in rough is likely to continue till January when the current oversupply situation will have worked its way through the pipeline. 

CORPORATE AND EVENTS

The world’s first diamond futures exchange will begin trading in India on Monday, enabling companies in the largest producer of the cut and polished gems to better hedge price risks, Bloomberg reported. “Indian manufacturers most require this type of financial product,” said Sanjit Prasad, managing director of the Indian Commodity Exchange Ltd. India carries the price risk of holding huge inventories of cut and polished and rough diamonds, he said, according to the Bloomberg report. The exchange, backed by companies including Reliance Capital Ltd. and MMTC Ltd., will start trading in 1 carat/100 cent contracts and will eventually add 50 cent and 30 cent contracts, he said. 

De Beers Group announced it will invest more than $140 million in marketing this year – its biggest spend since 2008. The increased investment will be focused on generating further consumer demand for diamond jewellery in the leading markets globally, with the greatest spend targeted in the US, China and India. While the majority of the investment will support De Beers’ proprietary brands, Forevermark and De Beers Diamond Jewellers, the company will increase its spend on partnership marketing, including with the Diamond Producers Association and India’s Gem and Jewellery Export Promotion Council, De Beers said in a statement. Stephen Lussier, De Beers Group’s Executive Vice President of Marketing and CEO of Forevermark, said: “Total consumer expenditure on diamond jewellery for the last five years collectively has been the highest on record – and the outlook is positive. However, we cannot take future growth for granted.  “Increasing our spend from a strong position will help support continued demand in both mature and developing markets, particularly among millennials, who are already the largest group of diamond consumers despite this generation not having yet reached its maximum earning potential.”

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