Waldman Diamond Company

Diamond Market Report - U.S. market remains cautious, but China surges forward
July 15, 2002

The increase in polished diamond exports from Israel in May and June suggest that business is booming. Polished exports stood at $304 million, an increase of more than 7 percent compared to the same month last year. The growth in imports of both rough and polished diamonds was in double digits, and rough exports in June doubled in weight and value. (See the attached charts).

But, according to Aharon Tamir, the senior sales director at the Waldman Diamond Company (WDC) Group, in Ramat Gan, the markets are still fragile. "While at the recent JCK show in Las Vegas, a decent amount of business was done, the U.S. market is still waiting for a true upsurge in sales," he said. "We, though, were satisfied. For us, trade shows like Las Vegas are an excellent opportunity to liaise with our clientele. As we run joint marketing programs with jewelry retailers, our appointment book was filled from early morning until closing time."

But, cautions Tamir, one good trade show does not necessarily make for a complete industry recovery. Observers of the U.S. jewelry industry have suggested that the jewelry market will grow between 4 and 6 percent in the second half of 2002. "Hopefully, that will mean we'll be real busy in the coming months,' Tamir said.

Meanwhile, both manufacturers and exporters of polished diamonds report intensive pressure on the prices of their goods. This comes at a time they are already very concerned about the continuous narrowing of the diamond industry's profit margins. "Neither manufacturers, nor exports will be eager to sell goods at reduced prices. They'll rather wait and see if the market really is firming up, and that means being ready to pay reasonable prices for goods on offer," Tamir stated.

In the first six months of the year, Israel exported $34 million of polished goods to China, compared to only $5 million in the same period of 2001. "That, " Tamir noted," is a great sign of China opening up to doing more business with Ramat Gan. The market potential there is simply huge!

Israeli companies who exhibited at the June edition of the Hong Kong Jewellery and Watch Fair were lukewarm in their reaction. "This show is not an event for the large players in the field. It is aimed at medium sized and smaller companies. Still, those companies who attended found that, while the Hong Kong diamond and jewelry market remains alert and vibrant, here too, the industry is waiting for that genuine upswing in sales that brings with it true market growth. Tamir said.