The Hong Kong Jewellery & Gem Fair set an improved tone for the diamond market despite challenging conditions in the Far East. Overall, it should be considered a good show as dealer trading picked up after a very slow summer. After all, given its scale and timing, the September fair is well positioned to signal the level of activity that can be expected in the important fourth quarter holiday season.
That’s not to say trading was exceptional. Rather, exhibitors came to the show with low expectations, which were surpassed. Buyers have been out of the market for a long time and its time now to replenish, explained Sandeep Selot of Elements Limited, a supplier of melee diamonds.
Indeed, a number of jewelry manufacturers noted they’re looking at buying diamonds after a long hiatus.
“We avoided buying in the past two years, which turned out to be a good decision,” said Ephraim Zion, managing director of Hong Kong-based Dehres Ltd, which specializes in large precious stones and high-end jewelry. “There are those with depleted stock who are considering buying again.”
Inventory in Balance
Still, the market is conservative and the show’s steady traffic did not translate into strong sales, exhibitors noted. Buyers were cautious and polished diamond suppliers were not prepared to reduce prices as they tried to protect their margins against a buoyant rough market.
Jewelry wholesalers and retailers may need to replenish stock, but they’re not buying as much as they used to as they’ve adjusted to managing lower inventory. The show demonstrated that the level of goods required by the industry has fallen in the past few years as major retailers, mainly from the Far East, have slowed their store expansion programs and consumer demand has stagnated.
