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November 2018 Market Report: Less Demand Than Hoped For

November 2018 Market Report: Less Demand Than Hoped For

From the perspective of the diamond wholesale market, the November-December holiday season is off to a slow start. Traders disappointedly reported a relatively sluggish demand from retailers. Demand, where it did exist, was focused on very specific items, largely focused on top makes. As a result, stock-building aversive traders felt forced to reduce prices on goods in lower demand.


Does the political climate impact diamond jewelry sales? In the US, where politics seem to be front and center in the past few years, there are some indications that the answer is a cautious ‘yes.’

Independent traders in pro-Trump regions of the US are reporting great business. Independents in blue regions seem less happy, reporting lukewarm activity in November. But maybe it is not just politics. Raging fires in California and unexpectedly bad weather on the Eastern seaboard, coupled with a surprisingly early snow storm, may have contributed to the slower store traffic in those regions.

Be it politics, weather, the economy or any other reason, diamond jewelry purchases in the first month of the holiday season were not spectacular. It is important to remember that the majority of diamond jewelry purchases last year were made in December.

Either way, every jewelry retailer, small and large, is trying to drive traffic into their stores. From newspaper ads and billboards to social media channels, all tried to convince consumers to buy early for Christmas.

Good quality 1-carat rounds are in demand as well as smaller certified goods (Dossiers). Colored diamonds are in very good demand, but only if retailers can hold them on memo. Traders have the impression that bridal jewelry is not moving well, while fashion jewelry set with smaller and lower cost diamonds will be a big item this holiday season.


Indian traders were on vacation for a major part of the month due to the Diwali holiday, fully returning to work only late in the month. Traders were largely firm on prices, partially due to shortages and an understanding that supply of fresh polished goods will not hit the market until early January.

A rise in demand was noted for thirds (0.30-0.39 carats) in top colors. Larger goods, 5 carats and above, made a strong change in direction. After a drop in demand in October, November saw a rise in demand nearly across the board.

No large change in demand for fancy-shaped or squared-shaped polished diamonds.

Hong Kong

Traders in the Hong Kong diamond center reported that the local market was stable in November, with an expectation for an improvement as Christmas and New Year near. Tourist traffic, usually an important driver of luxury retail sales, increased, however many local independent jewelry retailers said they did not see a large uptick in sales. Most tourists exhibited a strong preference for the large chains, such as Chow Tai Fook and Chow Sang Sang, underscoring the importance of brand recognition in creating consumer confidence.

The recent drop in demand in the wholesale section of the diamond market led to a price drop of about 2-3% in wholesale polished diamonds.

A small jewelry show, Hong Kong International Jewelry Manufacturers' Show, will run from the end of the month and close on December 2.

Polished diamond traders reported demands in the market for round-shaped goods, weighing 0.50-0.89 carats and 1 carat, in D-G colors, VS-SI clarities.

Among square shapes, a rise in demand for emeralds weighing 2, 3 and 5 carats, D-G colors, VS clarities. In fancy shapes, marquees, pear shapes, and ovals from 0.30 carats to 0.90 carats in FGH colors and VS-SI clarities are in demand for layouts.


Considering that it was November, it was a very slow month in the Israeli diamond center. The limited level of business activity baffled them. November is usually a busy month for Israeli traders, supplying loose polished diamonds to American independent retailers. One possible explanation is that the pace of activity in the 2018 holiday season will mimic the previous years’ form – delayed purchases that result in a last-minute rush during the second half of December. At least, that is what these traders should hope for.

The demands for goods were very selective, with traders only buying what they can sell off quickly. The rationale is that Israeli traders do not want to hold on to inventories. It ties up working capital and is deemed risky. In other words, this is a market acting cautiously.

To move low-demand goods, prices need to be reduced drastically, sometimes by as much as 20%, and at times, that is not enough either.

Very strong demand was reported for 0.005-carat rounds. Good demand for 0.06-0.08 carats. Demand for 0.10 carats has weakened, 0.25 carats in good demand as was the demand for 0.30-0.39-carat rounds. For all of these size ranges, the demand is for better goods. Goods high with inclusions or with lower colors are in very low demand. Also, the demand is for very specific sizes and measurements, with hardly any demand for everything else.

There is a large build-up in inventories of smaller goods. Traders of smaller items will work hard to make sure goods are not stuck in the safe, so deep discounts are offered to try to get the lesser desired goods purchased.

Steady demand for 1- and 2-carat rounds in F-N colors, VS-SI clarities. Cape goods (colors lower than N) in these sizes remain in very weak demand, prompting price reductions.

Demand for fancy-shaped goods is limited to perfectly proportionate goods with very good makes. Anything else is tough to sell and requires deep price reductions. Ovals remain in good and steady demand against a shortage in good makes. Pear shapes with nice and long 1.55 ratios are in good demand, as are emeralds with good proportions. All other fancy and square-shaped goods are in lower demand.

Fancy yellows are in low demand leading to a further price reductions, especially when it gets to poorly shaped goods. 


The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a Professional qualified adviser.





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