Tender Report July 2023
Market Overview:
The sluggish end to the first half of 2023 has shown little signs of improvement as we enter the all important second half. Ongoing global economic pressures continue to impact consumer behaviors in all major consumer centres. Polished sales in the lower qualities have slumped in US at retail level.
In addition, the significant impact of Lab Grown diamonds on swathes of polished diamond categories have collectively resulted in a steady decline in the prices of many natural polished ranges over the past year. This impact has been particularly devastating to the bridal category of 1-2ct polished. LGD is believed to have cannibalized as much as 50% of this category.
The leading rough producers have responded to the market weakness with rough price reductions, which in some areas are significant. The July Sight allocation of De Beers in Botswana, saw reductions between 5-15% in boxes 3grs to 10cts, with a particular emphasis on certain ranges of rough +2cts. Price adjustments were highest (15%) in rough producing SI/I1 polished, around 10% in the Commercial ranges, and closer to 5% in the Fine qualities.
Alrosa are also believed to have recently reduced rough prices in similar size ranges by between 5-20%. Even at the new prices the goods are difficult to defend. As previously reported rough goods in the -3gr sizes, in all qualities, remain more popular, but this again is predominantly to maintain factory requirements. Some reports indicate polished production is down by as much as 50% in India.
The latest statistics from GJEPC for June indicate a 32% year on year decline in polished exports from India, and a 33% drop in rough imports. The signing of a 10-year supply agreement between De Beers and the Botswana Govt. brought an end to a long period of uncertainty for the market. While the full impact of ‘the detail’ is yet to be seen, the markets have responded positively to some level of stability in the current market.
US Jewellers continue to resist holding inventory, preferring to buy only in response to specific orders with a preference for memo business. The seeds of recovery in China which were seen at the end of 2022 have failed to materialise, and manufacturers see little improvement until Q4, at the earliest.
TAGS Tender.
Following the postponement of our June tender, because of poor demand, and extended factory closures in India, TAGS were pleased to present approximately $35m to a globally based clientele.
In total we welcomed around 110 companies. As ever the production was a full range of Southern African goods with a significant number of Single stones +10ct. While sales in the +10ct size ranges remained fairly steady, not unexpectedly, the overall results broadly reflected the market situation outlined above.
There was a marked softening of price and demand in most goods between 3grs and 10ct, with smaller sizes performing well. Overall, we sold to 45 international companies and achieved sales of approx 50% of goods presented.
Our next sale will take place at our new tender facility in Dubai between the 16th - 21st August.
