Rapaport Magazine
Economics

Global Diamond Demand

July 2008

By Rapaport
RAPAPORT... Antwerp
• 1- to 10-caraters in all colors in SI1+ are moving very easily because
   there’s  not enough supply to meet demand.
• For larger stones, there’s a wait-and-see attitude until the price increases 
  are  absorbed by the market.
• All rough suppliers have been increasing their prices by two-digit figures and 
  pressure on business continues to build.

China
• Demand is strong for round, G+, VS, ½-carat fine-make diamonds with 
  Gemological Institute of America (GIA) certificates, especially triple EX
  goods, resulting in price increases.
• Round, G+, VS, 0.60- to 0.69-carat fine-make diamonds with GIA 
  certificates are popular and hard to find.
• Sales are stable for larger stones in 1 carat+/VS+/H+, GIA-certified and 
  fine make.

Hong Kong
• Stones larger than 5 to 10 carats in H to J colors are still in great demand 
  and can command desired prices. Buyers are more squeamish about
  investing in top-grade stones, unless they have a firm order in hand.
• VVS goods are in very short supply and seem to be what every buyer is
   looking for.
• Although some buyers still insist on triple EX stones, most are willing to
  concede on the cut in order to have a cheaper alternative.


India
• After a quiet Vegas show, Indians were hoping for a better response in the
   June Hong Kong show.
• The liquidity crunch in the local market continues to affect trading. The
   dollar’s rise against the rupee throughout June increased trading activity.
• There is a shortage of goods across the board in better qualities ranging
   from  VS+/I+ for sizes smaller than 0.90 carats.
• 1 carat+ collection goods continue to remain hot with supply shortages.
• Demand for 2 carats+ is stable, with good availability.
• Demand is excellent for 3 carats+ and shortages persist.
• Demand has increased for fancy color diamonds, especially for yellows and 
  pinks.
• Demand is good for fancies smaller than ½ carat and there are shortages for 
  well-made goods.

Israel
• Big stones, as well as melee and goods smaller than 1 carat, had good
  movement at JCK.
• Even with price increases, demand for 8-carat+ stones is still strong and 
  they are trading above or close to the Rapaport price list.
• 30- to 70-pointers are regaining their popularity, especially in the VS2+ 
  clarities.
• Strong demand exists for 0.80 and 0.90 carats because of the much higher 
  prices being charged for 1 carat.
• Demand from Hong Kong is driving movement of low colors in the 1- to 2-
  carat range.
• Fancy colors are in moderate demand.
• Demand is good for squares in small sizes from 0.10 to 0.90 carats and for
  all fancy shapes from 1 carat and larger.

Japan
• The market is stagnant.
• The prices of quarters have gone up and are matching thirds.
• 4/4-grainers of good makes are very strong.
• Diamonds larger than 3 carats have gone up so much in price that dealers 
  are unable to replenish their inventory.
• High-color melees remain strong.

Russia
• ALROSA sold $437.4 million worth of diamonds in the first quarter of
  2008. According to the company’s quarterly reports, this is almost 25
  percent less than sales in the first quarter of 2007.
• Total revenue for ALROSA’s first quarter of 2008 was $615.8 million and
   net profit was $48.9 million.
• ALROSA sold more than $17 million in uncut diamonds at an international
  diamond auction held June 19 in Moscow. More than 30 companies from
  Russia, Israel, Belgium, India and the United Arab Emirates (UAE) bid on
  104 parcels containing 334 diamonds weighing more than 5,200 total carats. • The biggest diamond sold at the auction weighed 39.36 carats and one lot 
  was sold for a record $48,000 per carat.

U.S. Retail
• Round cuts lead engagement sales, with cushion and princess cuts tied at
   second and emerald cuts gaining ground.
• The best-selling carat weight is 1 carat, the most popular colors are F, then
   G, and VS2 is the top clarity, followed by SI1.
• Customers are asking for platinum
   settings again. The metal has climbed back into the top spot, followed
   closely by white gold, with yellow gold and palladium coming in tied at a
   distant third.
• $5,000 is the average price for an engagement ring, including stone and
   setting.

U.S. Wholesale
• Buyers seeking D-F, VVS, triple EX and AGS ideal diamonds are
   becoming open to goods as small as 1 carat.
• Demand is slowing for VS2, while SI is picking up.
• D to G stones are meeting strong demand.
• Emerald cuts are slowly gaining popularity.
• There are increasing requests for high-quality 6- to 12-carat heart-shaped 
  stones.
• Micropavé looks continue to sell.
• 4-carat+ high-quality goods remain extremely strong.

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