Polished trading in Israel slowed for the Jewish festivals
in October, but even accounting for that, sentiment was weak. While companies
with a niche are performing well, dealers are finding it hard to a make profit.
“Israel, for the long run, will shrink more,” said one
polished trader on condition of anonymity, bemoaning the state of the nation’s
diamond industry. “You have office vacancies [in the Israel Diamond Exchange
(IDE)]. It shows you people don’t want to be in this business.”
Buyers are generally not purchasing large quantities for
stock, making it hard to move goods, according to the trader, who said his
firm’s revenues were down 50% this year.
Traders also noted a shortage of well-cut diamonds in
certain size categories. This makes it hard to meet clients’ needs, but it does
indicate that there is a degree of appetite in the market.
“There are no nice goods from 4 carats to 20 carats,”
another dealer said. “Up to 4 carats, you see a lot. It means the market is
there, because there is demand.”
Traders saw mixed results at the September Hong Kong
Jewellery & Gem Fair. Those committed to selling succeeded in moving their
goods; for others, business was slower. One trader, who rated his Hong Kong
show as “six out of 10,” was optimistic that the market would return now that
the summer vacation and October Jewish holidays were over. Dealers expect
sentiment to pick up ahead of the fourth-quarter holiday season.
The Hong Kong show was successful for those Israeli traders
who were in a position to capitalize on the strong Asia market for high-end
goods.
“Hong Kong was very good for us,” said Michael Meirov, CEO
of MID House of Diamonds, cautioning that MID’s large international presence
meant its performance did not necessarily reflect that of the Israeli market.
“We sold a lot
of big stones in Hong Kong, [weighing]
5 to 10 carats,” he said, adding that demand for large
diamonds in fancy shapes was strong.
Retailers globally have a preference for buying goods on
memo, or consignment, meaning suppliers only get paid once the jeweler sells a
diamond. However, buyers at the Hong Kong exhibition were purchasing goods for
orders they had already received from customers, Meirov explained.
With bigger stones becoming more of a specialty for Israel,
the IDE managed to entice Gem Diamonds — a miner focused on large and
high-value rough — to hold its inaugural rough tender at the bourse.
Previously, the company had only sold stones in Antwerp.
The company will host an additional three or four tenders in
Israel in the first half of next year, including one in January. It will then
decide whether to continue to run sales approximately every two months or to
end the venture, explained Gem Diamonds CEO Clifford Elphick in an interview
with Rapaport Magazine.
Elphick, who was visiting Israel for viewings of the goods
in October, said interest in the miner’s production had exceeded his
expectations.
“There are a number of very strong companies [in Israel] who
don’t travel to Antwerp, and it may work to do tenders here,” the executive
said. “We already have 50 clients viewing the goods. We have a waiting list. We
didn’t realize it would be like this. It’s extremely encouraging.”
Article from the Rapaport Magazine - November 2017. To subscribe click here.