Waldman Diamond Company

Diamond Market Report - China surges, United States edges upward, but Europe and Japan still weak
May 2, 2002

After dipping slightly in February and March, sales in the United States appeared to firming once again, confirming general economic data that a strong market recovery was likely during the second half of the year. Larger U.S. retailers, and especially those that run sales programs in cooperation with their suppliers, are fueling the market, although they may have lowered their demand for clarities somewhat, said Aharon Tamir, the senior sales director at the Waldman Diamond Company (WDC) Group, in Ramat Gan. SI and pique goods were moving reasonably well, he said. "Clients will rather compromise in clarity than with make," he stated. "AGS ideal goods are moving well, and there is a readiness to lower the demand from VS to SI," he said.

Sales in Europe remain less than satisfactory. "The Basel show was a disappointment for many companies. Neither the traffic there and certainly not the sales or orders offered any indication of a recovering market," Tamir stated. "In general, the introduction of the euro banknotes in the most Western European countries has made the diamond business much more competitive. Companies, wherever they are located, have a single frame of reference and that really has leveled the playing field."

In Asia, the end of April signals the conclusion of the fiscal year, and May 1-labor day¾will be the first opportunity in a while for many consumers to go out and spend some of the hard earned money on luxuries. "Sales in China are actually pretty good, Tamir stated. "The Chinese consumer likes to buy his or her diamonds with a grading report¾most of which are produced by local labs. They are buying goods from 10 points and up in colors that range between H and J, in a range of clarities that do not fall under the I2 -P1 borderline."

Japan is showing no real improvement in diamond sales, Tamir said. "We know of several companies that sticking it out there, despite the fact that they are actually losing money there. That is understandable, since in Japan long term relationships are highly valued. As far as the WDC Group's presence in Japan is concerned, we will continue to service our clientele in Japan." Tamir stated.