Key Insights from Bonas Market Report

General Thoughts

The most positive aspect of the first quarter of this year has been how steady consumer demand has been globally. Indeed, some are already forecasting a small overall increase over 2018.

The mid-stream, though, has lost confidence. Rough manufacturing for the most part is considered loss-making or at best breakeven, despite a slight tightening of rough supply. Bankruptcies of what are believed to be well-regarded companies are happening relatively frequently. And polished prices are at best static, despite shortages being registered in certain areas. It is hoped that the current polished destocking that appears to be happening in many of the major trading centres will leave companies in a far healthier state. But time is of essence.

Global rough sales for the remainder of 2019 are expected to tighten yet further. It is quite probable that premiums, especially in some areas, will rise. The availability of certain ranges of polished are also likely to be further reduced. However, if no polished price growth is registered, manufacturers are likely to see their losses widen. The big question is how long will it take for the situation to stabilize? At the moment, no one can predict when that will be.

In terms of the US retail sector, The Conference Board Consumer Confidence Index® declined in March, after increasing in February. The Index now stands at 124.1, down from 131.4 in February. Despite these dynamics, consumers remain confident that the economy will continue expanding in the near term. However, the overall trend in confidence has been softening since last summer, pointing to a moderation in economic growth. Same-store sales at Signet Group decreased 2% for the 4th quarter of its financial year. Kay and Jared saw same-store sales fall 1.6% and 8.4% respectively for the period. Online giant, James Allen also saw a drop-in sales – by 1.4%. Zales and Peoples saw sales increase 2% and 2.1% respectively.

Read the complete report from Bonas here.