The midstream has not taken any solace from February. The much-needed margins are still way beyond reach. Many feel that the only reason why so little has been refused lately is purely related to perceived future rough shortages rather than an increased appetite for rough. Whilst there is some hope that polished demand will soon pick up, this does not necessarily mean that profitability will return. It will merely bring some liquidity back into the midstream.
Hong Kong Trading Market
The first Hong Kong Diamond and Jewellery show of the year has just drawn to a close. This is an important event as it is the first trade fair after Chinese New Year and therefore an important barometer to gauge retailers’ appetites. The event is spread over two locations: diamonds at the Asia World Expo, and jewellery at the Exhibition Centre in Wan Chai. It runs for seven days with a three-day overlap.
The show was well attended with the first two diamond days, in particular, being busy. Exhibitors did not leave for Hong Kong with great expectations, as the last few months had been very slow in the region. Therefore, it was encouraging to see that most of the demand came from the retail sector, clearly ready to buy again after several months of absence, albeit in a cautious and targeted manner. At the same time, there was very little B2B trading taking place, unusual for Hong Kong and perhaps an indicator that the mid-stream hasn’t got that same appetite, and is not prepared to hold too much inventory.