Peregrine Diamonds Ltd. PGDIF

DDC reports

[MrBigger]

Sales and Diamond Market

• The positive market condition of the first half of calendar 2016 was followed in the third quarter by more muted demand as the rough diamond cutting and polishing industry approached the annual shutdown period for Diwali in India. Prices have decreased by an average of 5% over Q2 fiscal 2017 reflecting this seasonal weakness in the market for lower priced rough diamonds. In addition, the demonetization of the Indian rupee following the third quarter is expected to delay a return to normal trading activity in these goods which normally are in strong demand as factories return to work to meet the restocking requirements of retail jewelers after the holiday sales season. This disruption is expected to continue to impact demand for lower priced rough diamonds into the first quarter of fiscal 2018.
• Caution prevailed in the diamond pipeline as polished diamond stocks built up through the quarter, but stable US retail demand has built expectations for a good holiday season. The retail jewelry market in China was noticeably more active as evidenced by a positive Hong Kong trade show in September. Mainland based jewelers are more upbeat than their Hong Kong based counterparts who are still suffering from subdued demand in the local market.