Diamond Gems Weekly - August 5.
It has been a minute since I was last in India. Two years ago, to be exact, was my most recent pilgrimage to IIJS Premier in Mumbai. That’s the India International Jewellery Show to give its full due.
A lot has changed since then, both for IIJS, India and the world. For its part, the show is now spread across two venues, including the swanky new Jio World Convention Centre, which should make for a comfier experience.
For those of you reading this in New York, Antwerp, Ramat Gan, Johannesburg, Dubai or elsewhere, and wondering, what relevance does this have to me? Well, true enough, the show is primarily a domestic event.
There was a time when the organizers tried to push an international agenda to boost loose diamond trading there. But India’s polished import duty, which was left unchanged at an astonishing 5% in last month’s budget update, long ago quashed that idea. The government really does need to lower the rate in support of the industry.
Which brings us to the main reason that you should care… because India matters.
The country is being touted as the new China in terms of growth markets for diamond jewelry. So there’s an opportunity there and IIJS gives a good snapshot of domestic jewelry demand. Secondly, you can’t grasp the state of the global diamond market without understanding India’s trade. It’s still the market maker, and we should take every opportunity to gain the perspective of manufacturers and dealers there.
So, as I pack my bags, with good walking shoes at the top of my list of necessary items to bring, I look forward to sussing out India over the next few days. I’ll also be presenting at the show’s Innov8 seminars at 2pm on Friday, August 11. Join me if you’re around and say hi if you catch my pale bald head roaming the aisles of the show.
There’s much to discuss, including these shift-shaping stories that hit our inboxes in the last seven days.
1. What of that drawn out u-shaped recovery from which De Beers assures the market will emerge? The company has a challenge to get its own house in order, while also stimulating desire for diamond jewelry. That may all play out in the second half of the year as I outline in my latest Diamond Minute video update.
2. If we needed another reminder of the weak rough market, we got it from Rio Tinto. The group reported diamond revenue fell 40% year on year to $149 million in the first half, while the business unit suffered a $65 million loss versus a $44 million profit. Rio owns the aging Diavik mine, where production dropped 25% to 1.4 million carats during the period.
3. Sometimes, how you sell is as important as what you sell. In a weak market, the tenders and auctions tend to outperform the contract rough sellers. Tender house Transatlantic Gem Sales (TAGS) managed to sell all 46 stones on offer at its July tender of Angolan rough, despite “the current challenging conditions in the rough diamond market.” The sale, conducted in conjunction with Angola’s state rough marketing agency Sodiam, raised $21.6 million with 40 companies bidding for goods.
4. The major US jewelry retailers seem to be lagging behind the independents, as we suggested in last week’s Diamond Gems newsletter. Berkshire Hathaway reported revenue from its “other retailing businesses” fell 4.5% to $4.7 billion in the second quarter. The unit includes non-jewelry businesses such as See’s Candy, Pampered Chef, and a party supplies retailer, but still gives a telling signal about the state of its jewelry businesses – Borsheims, Helzberg, and Ben Bridge.
5. Finally, the World Gold Council’s quarterly Gold Demand Trends Report always gives good insight to the jewelry sector. Global demand for gold jewelry fell 19% to 390.6 tonnes by volume, and slid 4% to $29 billion by value in the second quarter. Record gold prices fueled caution among consumers, as demand in India dropped 17% and mainland China slumped 35%.
Image: Flag hoisting at the opening of the 2023 IIJS show. (credit: IIJS).
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