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Rapaport Weekly Market Comment
Jul 14, 2016 11:00 AM
By Rapaport News
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Market seasonally quiet. Prices stable but financial pressure mounting as polished inventory grows. Inventory levels increased significantly in 1H amid aggressive rough buying and sluggish polished demand. Profit margins and liquidity tightening as activity slowed in July. Share placement values ALROSA at $7.5B as government reportedly sells 10.9% stake for $818M. Okavango 1H rough sales +23% to $284M, volume +35% to 1.75M cts., average price -9% to $162/ct. Petra, Ekapa merge Kimberley mining operations. Belgium June polished exports -17% to $1.2B, rough imports -11% to $945M. Chow Tai Fook 1Q China sales -13%, HK / Macau sales -22%.
Fancies: Ovals and Pears doing well. Cushions supported by specific orders. Emeralds selling with improving large-stone demand. Princess and Hearts slow. Top quality fine-cut fancy shapes OK but buyers are extremely picky. Overall fancy shape prices relatively soft. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1 ct. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.
United States: Trading quiet with many dealers still on vacation. Activity expected to remain slow through July / August summer period. Steady demand for better-quality, RapSpec A2 diamonds. Some buyers in India and Israel looking for bargains. Retailers insisting on memo rather than buying inventory. Jewelry sales stable with seasonal bridal demand during ongoing wedding period.
Belgium: Sentiment weak as dealers anticipate slow trading throughout 2H. Suppliers preparing for vacation before bourses officially close from August 1 to 22. Stable demand for 1 ct., G-J, VS-SI and for 0.50 to 0.80 ct., D-F, VVS-VS diamonds. Suppliers holding high inventory following aggressive 1H rough trading. Rough demand slower in July.
Israel: Polished trading slow ahead of August summer vacation. U.S. demand stable with some post-Vegas orders and goods sent on memo. Dealers waiting for September Hong Kong show before market improvement. Some liquidity concerns as banks continue to tighten lending. Steady demand for 0.30 to 0.89 ct., G-J, VS-SI, 3X diamonds. Good fancy shape demand for top-quality pears. Rough trading slow.
India: Manufacturer inventory rising as dealers avoid extra supply. Liquidity tight after strong rough buying in 1H. Some polished suppliers offering higher discounts looking to boost transactions and improve cash flow. U.S. trading quiet during vacation period. China steady, Hong Kong slow. Domestic Indian demand sluggish. Manufacturing stable but rough demand declined since De Beers June sight.
Hong Kong: Polished trading weak on slower consumer jewelry demand across Greater China. Major retailers consolidating stores after aggressive decade-long expansion. Jewelers shifting focus to gold products as gold price increase stimulating investment demand. Bridal sales supporting diamond demand, while high-end luxury has slowed.
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Tags:
Rapaport News
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