Jewellery and gemstone companies are upbeat about prospects in the trade as buyers demonstrate solid interest in high-quality gems as well as classic jewellery designs at recently concluded trade fairs in Hong Kong.

Coloured gemstones are in high demand as Chinese customers return to the international trading scene and other markets seek to meet consumer interest for such gems.

Prices of good-quality coloured gemstones, from calibrated sizes to single stones, have thus increased, particularly for emeralds, rubies and sapphires, industry experts told JNA.

Phuket Khunaprapakorn, managing director of Thailand-based Gemburi Co Ltd, said the slowdown in rough production during the pandemic affected supply in the market. Supply shortages, pent-up demand and the return of Chinese buyers to the market at the Hong Kong International Jewellery Show and Hong Kong International, Diamond, Gem & Pearl Show, have resulted in substantial price hikes for good-quality rubies. The fairs were held from March 1 to 5, 2023.

“Bidding for ruby rough at auctions last year was extremely tight. The upcoming auctions in Bangkok are likely to be as competitive,” explained Khunaprapakorn, who is also vice president of the International Colored Gemstone Association (ICA).

Nirmal Bardiya, president of RMC Gems India Pvt Ltd, said strong demand in the higher end of the coloured gemstone market have driven prices up by at least 50 per cent compared to pre-pandemic levels. Aside from the Big 3 of the coloured gemstone world, also in demand are Paraiba tourmaline, rubellite, aquamarine and pink morganite.

While buyers from Europe, the US and Australia understood the reasons for the price increases, Chinese dealers at the show were still hesitant to spend, he said.

“Chinese buyers have been out of the market for the last three years and will thus take time to readjust to current pricing realities,” said Bardiya, who foresees further price hikes in the coming months given supply shortages.

Kiran Gems received a significant number of enquiries from mainland Chinese buyers during the show, said director Gautam Gopani. He noted that buyers from the mainland were particularly interested in fancy diamond shapes such as pears, hearts, emerald cuts, marquises and ovals. They especially favoured white diamonds in the VS to SI quality ranges, he added.

The diamantaire also entertained new clients from Eastern Europe, Israel and the US.

"Prices of diamonds have remained stable since the start of 2023. It appears they will gradually increase throughout the year. Our optimism over business prospects this year has been fuelled by the return of Chinese buyers to the market," Gopani said.

Jewellery preferences

Vicki Chan, general manager of Hong Kong-based fine jewellery manufacturer Continental Diamond, said traffic at the fair was mainly driven by mainland Chinese buyers.

"Sentiment is positive, thanks to Hong Kong fully opening up and lifting restrictions,” noted Chan. “However, we mostly saw buyers from China, and none from Western markets. We hope to meet with our long-term clients at the next show.”

The company official also revealed that buyers are gravitating towards classic jewellery designs. Continental Diamond offers an expansive range of top-quality diamond and coloured gemstone jewellery collections. “After the pandemic, consumers are now looking for simpler but very classy designs. It is back to the basics for everyone,” noted Chan. 

Bhavesh Parmani, owner of Thailand's Vama Creation Co Ltd, echoed this sentiment, adding that he is mostly selling smaller items such as rings, earrings and pendants as opposed to bigger, more elaborate diamond necklaces. 

Of these, rings are the top performers, with prices ranging from US$1,000 to US$2,000 at wholesale. The company uses G colour diamonds of VS and VVS quality.

Parmani said, “Customers would buy in quantity, but these are smaller items. Prices are too high for them right now and there is weaker spending power, too.”

The return of in-person B2B fairs however is a step in the right direction for the gemstone and jewellery trade, he added.

New markets, improving buying power 

The jewellery and gem industry could benefit from consumers’ stronger purchasing power, rising demand from new markets and business expansion in Greater China, an industry survey revealed.

The study was conducted onsite by the Hong Kong Trade Development Council (HKTDC) at the March Hong Kong Fairs, which it also organised. The shows gathered more than 2,500 exhibitors and attracted over 60,000 buyers from 130 countries and regions, with robust participation from China and Asia. The organiser surveyed around 700 exhibitors and buyers.

According to the research, approximately 60 per cent of exhibitors and buyers expect their business to bounce back to pre-pandemic levels in one year. Also, over 60 per cent of respondents expect sales to pick up in 2023 while 74 per cent of buyers anticipate higher sourcing costs.

Growth is likely to come from these markets over the next two years: China (78 per cent), Hong Kong (71 per cent), Association of Southeast Asian Nations (64 per cent), Northern and Western Europe (58 per cent) and North America (55 per cent).

Respondents also identified potential deterrents to growth, including macroeconomic challenges as well as rising inflation and fluctuating exchange rates.