29 May 2019
Majority of customers no longer buy for stock and are spending cautiously but diamond traders are not complaining as this dynamic change in buying behaviour is bringing about new areas of growth.
Global diamond traders are maintaining an upbeat outlook as buyers regain their appetite for a wide range of goods.
According to vendors interviewed by JNA at the March Hong Kong Fair, customers actively replenished their inventories after the holiday season, with China driving the growth.
Preferences ranged from classic rounds under a carat of SI clarity grade to 10-carat superior-quality stones. Buyers however are more cost-conscious, according to diamond dealers.
The beauty of luxury diamonds remains unrivalled and today’s economical buyer is still willing to spend for a top-quality investment stone, revealed Davide Scarselli of New York-based fine diamond and jewellery supplier Scarselli.
A paradigm shift in customer behaviour is also evident. Majority of buyers now visit trade shows with specific requests from their clients instead of buying for stock that they can resell, or closing deals at trade fairs.
“This is the current buying trend especially for high-value items. From a buyer’s perspective, it’s more efficient. Of course we’d rather close a deal right away but we want our clients to be happy and successful,” noted Davide.
The diamond expert cited a great deal of interest in top-quality yellows, specifically fancy yellow diamonds of 10 carats and up. Also highly sought after were pink and blue diamonds.
Majority of buyers looking for big quality pieces were from China and Hong Kong while a number of Europeans, Russians and Japanese asked for smaller but very high-quality goods, disclosed Davide.
He also cited the market’s continuous need for opulent diamonds and diamond jewellery, and buyers’ preparedness to invest in such high-value items.
“People are still willing to spend on investment diamonds and high-end pieces. The mentality especially in Asia is making a purchase that has value and can be resold or exchanged in the future,” noted Davide.
Diamond companies are likewise keen on offering fresh and innovative products to entice an increasingly discerning clientele.
Ghanshyam Dholakia, founder and managing director of India’s Hari Krishna Exports Pvt Ltd (HK Impex), said the market needs something different amid critical changes in the diamond business landscape that are affecting customer preferences.
HK Impex unveiled its “Allove” patented diamond cut at the March Hong Kong Fair and gained positive feedback from potential buyers, particularly from the younger generation, according to Dholakia.
An Allove diamond features 81 facets with 10 Hearts and Arrows as opposed to a classic round diamond, which has 57 facets with eight Hearts and Arrows. Allove diamonds provide stronger fire, sparkle and brilliance, the company official said.
Launching new and unique products in the market can effectively stimulate buyers’ interest, he added.
At present, HK Impex’s fastest-moving products are round diamonds of 30 to 50 points and VS and SI clarity grades, which are heavily favoured in China. Fancy shapes like oval and pear are also popular among Chinese and Far Eastern customers.
Diamonds of 1 carat to 2 carats as well as fancy shaped-goods of VVS and VS clarity grades likewise have a steady following. American buyers go for PK or pique and SI goods in fancy shapes and all sizes while those in North America prefer VVS diamonds.
The company’s main markets are the US, China, India and Europe.
Despite reduced rough production from the mines, Dholakiya remains optimistic about prospects in the diamond business, citing positive buyer sentiment.
“We hope this translates to stronger demand. Our company focuses on good customer relationship, and offering a uniform pricing scheme and quality after-sales service to show how we value our clients,” he added.
While buyers are keenly restocking their inventories after the December-January selling period, they are still stringent spenders, said Mishael Vardi of Israel’s VMK Diamonds.
The company’s core products are fancy colour diamonds but it also has a small range of white diamonds sold as side stones and matching pairs to complement customers’ jewellery requirements.
“Buyers are looking for new products with a good bargain. They’re especially interested in pink, blue and green diamonds, which are our speciality,” revealed Vardi. “Our main markets are China, Taiwan, Singapore, Indonesia, Thailand and Japan. We also have European and US clients.”
The company’s most sought-after products are pink diamonds followed by blue diamonds. A number of clients are on the lookout for higher-value intense or vivid pinks such as 1-carat stones and above of VS or VVS clarity grades.
“Pink diamonds between 70 points and 2 carats are the most popular. Per carat prices depend on the colour saturation and clarity of the stone. For below a carat, the average per carat price is US$7,000 while for one carat and above, it's US$30,000 a carat,” disclosed Vardi.
For price-conscious buyers, VMK also offers price-point items in smaller sizes and lower clarities.
Shahaf Maroodi of Israel-based Ofer Mizrahi Diamonds echoed Scarselli’s sentiment that buyers are finding it more difficult to buy goods for stock owing to tightening prices in the diamond industry.
Prices of polished goods continue to drop while rough prices are escalating, making it difficult for wholesalers to purchase goods for stock, he added.
The company’s most coveted products are those certified by the Gemological Institute of America (GIA) but goods from 10 pointers and up without certificates are also moving.
“We offer diversity. We are like a one-stop shop. GIA goods of 1 carat and up in KLM colours understandably move faster as these offer value for money,” Maroodi added.
Diamonds of 1 carat and up fall within the per carat price range of around US$2,500 to US$4,000 while 3-carat, SI stones sell for about US$20,000 to US$25,000 or an average of US$7,000 a carat.
Better-quality 3-carat stones carry a US$50,000 price tag or about US$15,000 to US$20,000 per carat, according to the company official.