Post Vacation View of the Market

(ehudlaniado.com) - The summer vacations are behind us, and the diamond industry is already in full motion. The range of activity is large, and as we start thinking (and working) towards the important November-December holiday season, it is worthwhile to take stock of where we are, and where we are going. Summertime is a time to relax and unwind. It is also a good time to contemplate the past year, and plan ahead for the next one. So far this year, we had a very difficult market. Valentine’s Day diamond jewelry sales in the US were slow, and demand for diamond jewelry on Mother’s Day was weak. As consumer demand declined, polished diamond prices continued to fall across the board. At the same time, we saw a rise in rough diamond demand from the manufacturing section of the diamond pipeline. The natural result was a sharp rise in polished inventories held by the midstream. Other trends of the past year included poor spending on marketing, and a decline in sales by the leading (and publically held) specialty jewelers in the US as well as in China, the two leading consumer markets. These declines further hurt the diamond industry, because they not only resulted in a decline in wholesale polished diamond purchases, they also resulted in a large scale of returned goods from unsold jewelry items. This exacerbated price declines and stock levels among wholesalers in India, Israel, and Belgium.