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Israel
By Avi Krawitz
The atmosphere in the Israel Diamond Exchange (IDE) improved as dealers reported that polished demand and prices were stable at the Hong Kong show that took place at the beginning of March. Some 93 companies participated in the Israel Diamond Pavilion located at the Diamond, Gem & Pearl Show that took place at AsiaWorld-Expo from March 1 to 5. Another ten companies exhibited in other locations across the two venues of the show. “The mood at the show was positive,” said Michael Meirov, chief executive officer (CEO) of MID House of Diamonds, which recently ranked as Israel’s top exporter of polished diamonds in the annual listing published by the country’s Economy Ministry. “We still have that feeling of uncertainty about what is going to be in three to four months’ time but we had a good show that beat our expectations.” Shmuel Shnitzer, chairman of the Israel Diamond Institute Group of Companies (IDI), which organized the show pavilion, stressed that Hong Kong remains a very important market for the Israeli trade despite the current slowdown in China. Israel’s polished diamond exports to Hong Kong fell 28 percent to $1.35 billion in 2015, ranking it as Israel’s second-largest market behind the U.S. “We believe in the future of this market and we’re there to show support,” Shnitzer added.
Israeli exhibitors arrived in Hong Kong hoping the show would create some trading momentum after they endured a tough market environment in 2015. While expectations for Chinese demand before the show were low given the economic slowdown and the recent slump in the financial stock markets, dealers noted that trading has picked up in 2016 compared to last year. “The mood this year is better and people are buying,” said Meir Hershler, of Sorum Diamonds, a supplier of large diamonds. “The dealer market is not bad and you can catch a few deals.” Meirov said MID sold mostly to its regular customers, which included Chinese retailers and privates. He stressed that his Chinese clients bought the same amount as they always do. “That means there was repetition, which is encouraging,” Meirov added. Most Israeli exhibitors who spoke with Rapaport Magazine reported that activity was driven by dealer demand for .30-carat to 1.99-carat, G to J, VS to SI, GIA-graded diamonds. The middle-range quality diamonds moved very well and prices were steady, Meirov said.
Aviad Kashi, vice president of Moti Kashi, a supplier of large-size round and fancy shape diamonds, reported there was a lot of interest in large stones at the show. However, while buyers made offers, there was a notable difference between sellers and buyers regarding price. Similarly, Hershler added that the big-stone market is a bit quieter than smaller commercial goods since demand is cautious and there are not too many large diamonds available. “If you have a nice stone or are willing to be a bit flexible on price, you have no problem to sell,” Hershler said about the big-stone market. “If you have to speak for the stone and convince the buyer to buy, you sell cheap. But if the stone speaks for itself, it sells at a good price.” Overall, Kashi observed that suppliers are willing to hold onto goods rather than compromise too much on price, particularly as there are still shortages in better-quality diamonds. Meirov agreed that there was resistance lowering prices among suppliers across the diamond exhibition, particularly among Israelis.
Israeli diamantaires in general felt that the market is in a healthy position at the moment. However, they were aware that could change very quickly, as they expect an influx of polished to the market since manufacturers have raised their production levels this year. Meirov stressed it’s just impossible to predict how the market will evolve as large volumes of new rough bought to date in 2016 come to the market as polished in the coming months. People are wondering whether demand will meet the new supply and if it will have an effect on prices, he pointed out. Kashi expects that as market conditions change, so will the manner in which dealers operate, with a continued shift toward online trading and with more dealers reaching out to the end consumer and privates. While the shows such as those in Hong Kong provide an opportunity to network and meet existing and potential clients, he projected that online trading will become more important. “I think that 2016 will be a unique year because the market is different and the world is changing,” Kashi said.Article from the Rapaport Magazine - April 2016. To subscribe click here.
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