Rapaport Weekly Market Comment

Sharp decline in diamond trading amid fears coronavirus will lead to global slowdown. Midstream inventory losing value as manufacturers consider deeper discounts to raise liquidity. Polished prices falling due to China shutdown, with 1 ct. RAPI -1.6% in Feb. De Beers allows deferral of Chinese goods as sales -28% to $355M at Feb. sight. De Beers to customize sightholder supply for dealers, manufacturers and retailers starting in 2021. Belgium Jan. polished exports -22% to $605M, rough imports +14% to $829M. Baselworld canceled due to virus, JCK Las Vegas shows still on. Martin Rapaport to give Diamond Market Challenges webinar Thursday Mar. 19 at 10 a.m. GMT and 12 p.m. EST.

Fancies: Some weakness in fancy shapes below 1.25 ct., but overall demand more stable than rounds since fancies are not as popular in China. Pears slower due to sluggish Hong Kong market. Ovals are strongest shape, driven by US fashion jewelry demand. Well-shaped and fine-cut fancies have become profitable niche with good demand and strong prices, especially Ovals, Emeralds and Pears. Emeralds above 2.50 ct., D-G, VVS2-VS2 also selling well. Shortage of top-make fancies 1.50 ct. and larger. US sustaining market for commercial-quality, medium-priced fancies. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Polished trading weak, ending the positive momentum that started off the year. Overseas dealers trying to sell in New York as Hong Kong and China reach a standstill. Single stones for engagement rings supporting the market. Shortage of melee, G-I, I2-I3 goods. Jewelers focused on bridal ahead of summer wedding season, with consumers cautious following stock-market slump.

Belgium: Dealers avoiding inventory buildup during coronavirus uncertainty. Foreign buyers staying away. Dossiers trading at deep discounts. Some demand for round, 2 ct.+, H-I, IF-VS2 diamonds and for well-cut pears and ovals. Sluggish rough market following small De Beers sight.

Israel: Activity slow with virus impacting demand among Far East suppliers. Businesses and bourse closed over March 2 national election public holiday. Suppliers concerned about decline in inventory value. Fewer orders for round, 2 ct.+, D-F, IF-VVS goods. Rough trading quiet.

India: Liquidity tight as companies prepare accounts ahead of March 31 financial year-end. Coronavirus affecting cash flow, with Chinese clients delaying payments or returning unsold goods. Travel restrictions reducing presence of foreign buyers in Mumbai. Strict customs controls and volatile rupee (-2.6% since February 1 to INR 73.4 / $1) creating challenges for cross-border trade. Steady supply of new polished coming to market from rough bought at high prices in January.

Hong Kong: Wholesale and retail very slow. Orders from China have stopped; those from broader Asia Pacific market, including Japan and Singapore, have declined. Chinese factories have resumed operations at reduced capacity to meet demand from online retailers. Dealers concerned that impact on trading will spread to US and Europe. Jewelry stores remain either closed or operating fewer hours with skeleton staff.