Tender Report May 2023
Market Overview:
Having been able to report a slight upturn in the global rough market over the past two months, the past 4 weeks have witnessed a significant change. Cheaper goods and small sizes -11, which have been resilient and maintained firm prices, to primarily maintain factory requirements, have now softened and begun to reflect the reality of polished demand, and price.
High inflation rates, the collapse of several banks, and the ongoing conflict in Ukraine, have all culminated into very slow global polished demand. Another significant factor is the lack of liquidity in the market. Where cash is available, high interest rates continue to have a major impact on doing business. Last week the Fed pushed the rate to 5.25%.
We understand during the May Sight, De Beers have reduced prices in some areas, particularly +2ct up, with a focus on those producing SI polished, by between 8-12%. Even after these adjustments the market reports the goods are still difficult to defend. Additionally, ODC presented close to 700k carats of rough into an already delicate market.
Recent reductions in polished prices on the Rappaport index have also dampened sentiment.On a more positive note the recent increase in Chinese tourism, which rose sharply on the first day of the 5 day Labour Day holiday, gave Chinese consumers theopportunity to travel and spend for the first time in 3 years. However, the strength and sustainability of the recovery remains in question in a weak domestic economy.
Payments to Russia continue to be broadly blocked, which is stalling the flow of goods from Alrosa, which currently is a great benefit to the market. Additionally, the bilateral discussions between India and Russia for Rupee payments have been suspended. India is now entering the holiday period, with factories closing this week for between one and two weeks, slightly longer than usual.
TAGS Tender:
TAGS presented its regular range of high quality Sothern African goods, containing a full range of sizes, which included a number of Single stones and Exceptional Specials, amongst which was a 114.3ct D Col clean stone which attracted a great deal of interest from buyers in all the major markets. In total we presented approximately $30m.
We welcomed around 150 companies, from all the leading centres. As reported by other tender houses recently, and reflecting the published results of ODC, sales were in line with the recent dip in the market, which were disappointing when compared to recent months.
Regrettably we were obliged to withdraw a greater proportion of Lots presented than previous months. We saw a weakness in areas producing SI ranges across a range of sizes. Single, +10.8 carat Stones held up better than other sizes, where prices dropped in line with market expectations.
TAGS forthcoming tender will take place in Dubai between 7th – 13th June 2023.
