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2014 Diamond Review

January 

• Polished markets stable with very strong demand for 0.30-0.40ct. diamonds and large inventories building up at GIA. 
• U.S. [2013] holiday season good but discounting reduced profit margins. 
• Markets optimistic but concerned about higher rough prices reducing profit margins. 
• Polished buyers resisting higher prices based on rough. 
• Cutters afraid to raise polished prices as Hong Kong-China demand weak and program buyers demand stable prices for stable orders. 
• De Beers hikes prices by average 5% as $700M January sight sold out due to pent up rough demand. 
• Rough trading stable but manufacturers expected to restrain future buying as bank credit tightens.
• Indian diamond manufacturing below capacity with tight liquidity.
• RapNet Diamond Index (RAPI™) for 1ct. laboratory-graded diamonds +1.2% in January.

February

• Far East sentiment improves after good Chinese New Year jewelry sales. 
• Chinese New Year increases sales of affordable jewelry but luxury demand slows. 
• Polished markets optimistic with high expectations for important Hong Kong show. 
• Polished trading stable with firm asking prices, shortages and selective demand. 
• Strong demand for 0.30-0.40ct. GIA dossiers. 
• Liquidity improves as inventory levels decline but GIA backlog causing shortages. 
• Large volume of polished goods expected to enter market with 50-day backlog at GIA and Indian cutters increasing manufacturing. 
• Suppliers hope polished prices will catch up to rough prices, enabling a return of profits to the diamond manufacturing sector as De Beers acts responsibly by keeping rough prices stable. 
• De Beers February sight estimated at $650M. 
• Petra Diamonds sells 29.62ct. blue rough diamond for $25.6M ($863K/ct.)
• Rough markets very strong and speculative as Indians dominate market. 
• Rough prices surging to unsustainable levels as Indian manufacturers make use of easy government supported bank credit that may end in April. 
• RapNet Diamond Index (RAPI) for 1ct. +0.3% in February.

March

• Positive sentiment spreads to trading centers after Hong Kong show meets expectations and demonstrates strong Chinese demand for under the carat certs. 
• Polished markets optimistic but liquidity under pressure due to tight bank credit and high rough prices. 
• Suppliers complain they cannot replace polished at current rough prices, with many buying polished instead of rough.
• Polished markets stable with strong demand for GIA dossiers. 
• Dealers shifting to diamond parcels, non-certs. and 0.25ct. sizes due to 0.30ct. shortages caused by GIA delays. 
• Far East shifts to lower colors.
• Demand for large diamonds robust as Basel shows begin. 
• Liquidity improves but bank credit tightening and cutters concerned steady Hong Kong show will signal further unsustainable rough price hikes.
• Strong Israeli demand for large rough at International Rough Diamond Week. 
• Gem Diamonds sells 162.06ct. diamond for $11M ($69K/ct.). 
• Antwerp chases Zimbabwean rough supply, strengthens ties with Russia. 
• Rapaport Melee Index (RMI) +5.4% to 137.6 in 1Q. 
• RapNet Diamond Index (RAPI) for 1ct. +0.8% in March.

April

• Diamond trading very quiet during Passover and Easter holidays. 
• Polished markets stable but buyers are increasingly price sensitive as cutters try to raise prices due to expensive rough. 
• Far East demand slow ahead of May 1 retail season. U.S. market stable. 
• De Beers raises prices 3%-4% at $700M April sight, reducing dealer demand on secondary market.
• Cutting center liquidity tightening due to high rough prices and GIA backlogs.
• Basel shows and auctions signal strong demand for top quality large diamonds:
o Christie's New York sells 22.60ct. & 22.31ct. D, IF pair of circular-cut diamonds for $191K/ct. 
o Christie's New York sells a 6.10ct., VVS1 fancy intense-pink rectangular-cut diamond for $5.8M ($945K/ct.). 
o Sotheby’s Hong Kong sells brilliant-cut, 30.57ct., D, FL diamond for $6.5M ($214K/ct.). 
• Zimbabwe plans UAE diamond embassy as Dubai holds inaugural Marange rough tender. 
• Reserve Bank of India removes restrictions on advance payment for rough diamonds to foreign mining companies.
• RapNet Diamond Index (RAPI) for 1ct. -0.5% in April. 

May

• Sentiment improves as Dow hits record high. 
• Diamond trading stable with good U.S. demand for commercial-quality diamonds but buyers are very price sensitive. 
• Indian manufacturers slowly return from vacation while liquidity concerns persist. 
• Indian market optimism boosted by Modi election victory. 
• Indian jewelers hoping new government will ease gold import rules to help stimulate demand. 
• Far East wholesale demand quiet despite robust jewelry sales during May Day holiday. 
• JCK Las Vegas show opens amid rising U.S. consumer confidence. 
• Rough markets stable following estimated $560M De Beers May sight. 
• Auction markets for large stones booming: 
o Christie’s Geneva sells pear, 13.22ct., fancy vivid blue diamond for $23.8M ($1.8M/ct.). 
o Christie’s Hong Kong sells pair of 25.49ct. and 25.31ct., D, IF, type IIa diamonds for $9.7M ($191,746/ct.). 
o Sotheby’s Geneva sells cushion, 100.9ct., fancy vivid yellow diamond for $16.3M ($163K/ct.). 
o Sotheby’s New York sells 15.23ct., fancy intense orange pink, VS2 diamond for $6.1M ($400K/ct.). 
• Signet buys Zale Corp. for $21 per share (about $1.4B). 
• RapNet Diamond Index (RAPI) for 1ct. -0.5% in May.

June

• JCK Vegas show meets expectations despite slower traffic from small independent jewelers. 
• Steady U.S. demand for affordable VS-SI commercial goods but trading weak for larger better-quality stones. 
• U.S. demand for inexpensive piqué diamonds very strong with prices firming. 
• Diamond markets seasonally slow as U.S. vacation period approaches. 
• Hong Kong show fails to meet expectations with some price softening. 
• Far East market slow with selective Chinese buying. 
• Indian retail sentiment improves on stronger rupee and lower gold prices. 
• Rough markets stable during $640M De Beers sight. 
• Cutters fighting for survival with low profit margins and tight liquidity. 
• Chow Tai Fook agrees to buy Hearts On Fire for $150M.
• Rapaport Melee Index (RMI) +1% in 2Q.
• RapNet Diamond Index (RAPI) for 1ct. -0.5% in June.

July

• Diamond markets seasonally slow with limited demand for top quality carat and larger stones. 
• The GIA backlog has reduced supply which is preventing lower prices. 
• Polished prices coming under increased pressure as some Indian cutters reduce 1ct. and larger prices due to weak demand, oversupply and cash flow requirements. 
• Steady U.S. and Far East demand for commercial-quality below 1ct., G-M, SI-I2diamonds. 
• Polished trading sluggish as weak Mumbai IIJS show loses appeal for diamond traders. 
• Some Indian manufacturers reducing prices for better-quality carat and larger sizes. 
• Global diamond markets are quiet with cutters frustrated by high rough prices during sight week. 
• Manufacturer margins and liquidity under pressure as rough prices increase in spite of declining polished prices. 
• July De Beers sight estimated at $775M with 1%-2% price rise. 
• Rough markets stable with seasonal Indian demand for pre-Diwali manufacturing. 
• RapNet Diamond Index (RAPI) for 1ct. -2.4% in July.

August

• Diamond trading quiet with Belgian and Israeli dealers taking August vacation. 
• U.S. market positive with moderate expectations for India Diamond Week in New York. 
• Polished buyers avoiding large inventory purchases before September Hong Kong show. 
• Diamond market demand shifting away from expensive better-quality goods toward lower-priced, commercial and promotional qualities. 
• Dossiers doing well, although Chinese market is relatively slow.
• Steady U.S. demand for commercial-quality SI-I1 diamonds helping Indian market. 
• Market sentiment weak with liquidity difficulties for manufacturers as banks tighten credit. 
• Polished suppliers offer greater discounts to generate cash as rough and polished inventory levels remain high. 
• Rough trading stable but manufacturer margins tight due to high rough prices. 
• De Beers keeps average prices stable at large $715M August sight but rough trading slows and premiums weaken on secondary market. 
• RapNet Diamond Index (RAPI) for 1ct. -1.4% in August.

September

• Hong Kong show improves outlook for holiday season but liquidity remains tight with significant buyer price resistance. 
• Strong visitor traffic but sales not booming due to stiff buyer price resistance. 
• Sellers that reduce prices are selling with some manufacturers lowering prices to generate cash flow as Indian liquidity is tight. 
• Steady demand for G-J, VS-SI goods. High-end, D-F, VVS+ very weak. 
• Rising concern about financial insolvencies in India as banks tighten credit policies and liquidity remains difficult. 
• Polished trading cautious with price-point buyers shifting to lower qualities. 
• Cash buyers getting significant discounts. 
• Rough trading slows as Surat manufacturers focus on cutting operations ahead of October Diwali season.
• Rough prices decline with some goods selling at 3%-5% discounts. 
• Petra Diamonds sells 122.52ct. blue rough stone for $28M ($225K/ct.).
• Rapaport stops listing all EGL grading reports on RapNet Diamond Trading Network, effective October 1.
• KBC Group to close Antwerp Diamond Bank. 
• Rapaport Melee Index (RMI) -6.8% in 3Q.
• RapNet Diamond Index (RAPI) for 1ct. -1% in September.

October

• Polished centers quiet over Jewish holidays with sluggish Indian demand ahead of important Diwali holiday season. 
• Polished markets under pressure with liquidity concerns as Antwerp Diamond Bank begins shut down process and other banks tighten credit.
• Buyers taking advantage of tight supplier liquidity as polished prices soften. 
• Cash buyers gain higher discounts as suppliers seek to boost liquidity.
• U.S. market stable with good demand for commercial-quality SI-I2 diamonds. 
• Market for 0.30-0.40ct. cooling as Chinese demand shifts to larger size, lower qualities. 
• Hong Kong trading declines as Chinese government restricts currency transfers and cracks down on corruption. 
• Golden Week luxury sales dampened as Hong Kong’s pro-democracy protests reduce travel to Hong Kong and close some stores. 
• Indian market closes for Diwali with soft holiday sales.
• Rough secondary market weak amid concerns of post-Diwali oversupply. 
• De Beers October sight estimated at $460M; few extra goods (ex-plan) sold with more refusals and deferrals. 
• ALROSA and De Beers maintain steady prices at October sales with some increases in select items.
• Rough prices discounted on secondary market as sightholders pay for the privilege of steady supply.
• Gem Diamonds sells 198ct., type IIa rough for $10.6M ($53,746/ct.). 
• Petra Diamonds sells 232.08ct. rough for $15M ($65,577/ct.) to Diacore. 
• Sotheby’s Hong Kong sells 8.41ct., fancy vivid purple-pink, FL [polished] diamond for $17.8M ($2.1M/ct.). 
• RapNet Diamond Index (RAPI) for 1ct. -2.2% in October.

November

• Polished prices under pressure after relatively weak Indian Diwali and Chinese Golden Week. 
• All eyes and hopes are on the U.S. retail market.
• Polished markets unusually slow before holiday season. 
• Dealers not buying for inventory. 
• Memo sourcing becoming more important given selective demand and tight market liquidity. 
• Liquidity situation significantly worsened by China’s restrictions on money transfers.
• Market for fancy shape and fancy color diamonds improving with increasing dealer demand due to oversupply and limited profitability of rounds. 
• Cutters offering lower prices to improve cash flow and buy high-priced rough in order to maintain next year’s sight allocations. 
• De Beers holding rough prices steady at small $550M November sight with some rejections. 
• Special stones smash more records at auctions: 
o Sotheby’s Geneva sells pair of oval, 20.05ct. and 20.06ct. D, IF, diamond earrings for $7.1M ($178,188/ct.) to Graff. 
o Sotheby’s New York sells pear, 9.75ct., fancy vivid blue, VVS2 diamond for record $32.6M ($3.3M/ct.). 
o Christie's Geneva sells pear, 6.95ct., fancy vivid blue, SI2 and pear, 6.79ct., fancy pink, VS2 ear pendants for $15.8M to Graff.
• Markets expect steady rise in Internet jewelry sales this holiday season. 
• RapNet Diamond Index (RAPI) for 1ct. -1.7% in November.

December

• Dealers adjusting their expectations to meet new realities. 
• Global demand is weak and there is an oversupply of diamonds throughout the distribution chain. 
• Buyer’s market prevails with great opportunities for aggressive traders willing to take positions. 
• Healthy U.S. market supporting the industry. 
• Polished market weakens with Thanksgiving weekend sales -11% to $50.9B, Cyber Monday online sales +17% to $2B as consumers move online.
• Widespread discounting as U.S. jewelry retailers hope to boost mediocre holiday season. 
• Polished prices under severe pressure with sharp drop in trading as buyers demand lower prices. 
• Sellers lowering prices as demand for cash exceeds demand for diamonds. 
• While some hot spots persist, overall market sentiment is negative. 
• Markets unstable due to imbalance between rough and polished prices. 
• Rough prices out of line forcing cutters to reduce polished prices to maintain liquidity. 
• Situation unsustainable as sightholders overpay for rough to ensure future supply in 2015, while polished demand declines. 
• Rough prices coming down as sightholders reject about 20% of overpriced rough at estimated $600M De Beers December sight.
• De Beers rough price index +7% in 2014. 
• ALROSA to raise rough supply to India as Mumbai gets special rough trading zone. 
• Christie’s New York sells pear, 89.23ct., D, VVS1 selling for $11M ($124K/ct.). 
• Sotheby’s New York sells 25.44ct., D, VVS1 selling for $3M ($117K/ct.). 
• U.S. sentiment improves as Dow surpasses 18,000, reaching record high after economy surges +5% in 3Q.
• RapNet Diamond Index (RAPI) for 1ct. expected to decline in December.


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