The resilient Indian diamond industry geared up during the month of July to face hurdles head on, whether it is a weakened rupee, rough shortage or high rough prices. Traders and manufacturers took whatever steps necessary to keep moving - they had a business to run.
While production in cutting centres was fairly good, it is said that some diamond manufacturers, who needed more rough, had to even dig into their rough inventory to cater to the demand for polished goods from overseas buyers as well as the Indian domestic market. Normally, large factories have stocks of rough enough for several months, in the event of its non-availability. Fortunately, there were no reports of payment default during the month, so far so good. But then, very few earlier defaults had any correlation with the market conditions. And going by history, defaults happened even in good times.
Meanwhile, it is the small and medium size diamond cutters who were severely affected because of high prices of rough arising out of the rupee weakening against the dollar. So much so that the Surat diamond officials had to approached the government-owned Minerals and Metals Trading Corporation of India (MMTC) to get help for the diamond units, which were on the verge of closing down due to absence of rough. According to reports, the MMTC has come forward to help and has put up the proposal to the Government of India. It is expected that small and medium diamond units will be saved after all.
For those who came in late, it would be interesting to know that it was the MMTC which used to supply rough to Indian manufacturers during the early days of the Indian diamond industry. The story goes on that the small cottage industry soon grew rapidly and the MMTC was not sought anymore by Indian companies for their rough requirements. Most of the companies began to buy rough from the open markets like Antwerp instead. They later graduated to sourcing from mining companies and mining countries directly and the rest, as they say, is history. For the MMTC of course, it is one full circle completed. The company may soon restart procuring and supplying rough for the small and medium diamond manufacturing units.
During the month of July, trading in Mumbai was quite active but not as expected, given that the festival seasons will soon be here. The slightly sluggish market is attributed to the volatile and weak rupee. This coupled with liquidity problems and high rough prices did nothing good for the industry, which is still reeling under cash crunch. However, larger polished exporters are doing pretty well, despite the market conditions. According to market sources, demand from the U.S. picked up rather well, while China slowed down a tad bit. Though some overseas buyers feel asking prices are high, most of them have made a killing in closing some very good deals. It is believed that polished suppliers have at times made deals because they were facing liquidity problems and were under pressure to sell even at low margins to ease their cash flow situation.
Diamond jewellery manufacturers or rather the whole gems and jewellery industry cannot be busier than they are, as preparation is underway for the India International Jewellery Show 2013 (IIJS 2013) in August. Innovations seems to be the key, with jewellery makers going all the way out to come up with classic designs to cater to buyers from all over the world. The story of listed jewellery makers tanking at the stock markets does not seem to have any impact on the jewellery sector on the whole. Even the affected companies are busy with their launches of new jewellery collections or even inaugurations of new stores in different parts of the country, as well as overseas.
The U.S. market has been good for both the loose polished exporters as well as the jewellery exporters. Good orders from the U.S. have kept both manufacturers busy throughout the month. Demand from the Indian domestic market too has been good for polished and finished jewellery.
Rough trading was slow during the DTC sight week, again due to the weak rupee and the perennial shortage associated problems. Reports of higher prices at the De Beers and ALROSA sights have also impacted rough trading in India.
The demand, supply pattern during the month of July 2013 was as follows:
POLISHED
Rounds
0.005-0.15 cts, F-J / SI+, v. good demand, selling very well; 1/5, H-J / VS
1/4-3/8, selling well, good demand
1/4-3/4, D-J / SI+, selling well; moving v. fast, but shortage of goods reported
1/2-3/4, white / pique, selling well, less goods in market
0.80-0.90 cts, selling well; F-J / VVS goods / shortage of good reported
1.00-3.00 cts, D-K / SI to pique, selling well, good demand, shortage of goods in market
1.00-3.00 cts, H-J / SI1+ strong demand for good makes
4.00+ cts, H-M / VS+ good movement
Fancy Cuts
Emeralds and stabbes (wide baguettes), 0.25-1.00 cts, good demand D-J / VS+, moving well
Marquises 0.25-5.00 cts, F-J / VS+, selling well, good demand
Princesses, Pears and Emeralds, 2.00-5.00 cts, good demand for H-K / VS, selling well
ROUGH
Makeables: high demand, shortage of goods
1-5 point: very good demand for makeables, good demand for OW TTLB & TTLC
6-20 point: good demand for crystals/makeables, shortage reported
Fancies:
21-50 point: fancy shapes are in good demand
0.51-1.00 carat: good demand for makeables, crystals
1.01-2.00 carat: good demand for rounds, crystals, all fancy shapes; shortage of goods
2.01-3.00 carat: high demand / shortage of goods
5.00 carat+: good demand for $1,000+ makeables, crystals and all fancy shapes
Mixed Lot: good demand
Aruna Gaitonde, Rough&Polished, Mumbai
