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Rapaport Weekly Market Comment
Jul 7, 2016 11:00 AM
By Rapaport News
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Diamond markets weak as U.S. dealers take vacation. Polished prices softening with June RAPI 1 ct. -0.5%, 0.30 ct. -1.6%, 0.50 ct. -0.4%, 3 ct. -2.4%. Yuan currency cut to 5-year low (6.69/$1) may impact Chinese jewelry imports and tourist spending. Global 2015 rough production -4% to $13.9B, volume +2% to 127.4M cts., average price -6% to $109/ct. Dominion lowers 2016 Ekati production plan -16% to 4.7M cts after $19M fire damage. Petra sells 121.26 ct. Cullinan rough for $6M ($49,480/ct.) to Nemesis International and Golden Yellow Diamonds. U.S. May polished imports +2% to $3.1B, polished exports -1% to $1.4B.
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: Market quiet with dealers on vacation and NY Diamond Dealers Club closed from July 1 to 11. Some U.S. buyers in India and Israel looking for bargains during slow period. Suppliers frustrated at retailers taking goods on memo for long periods. Stable demand for commercial-quality, G-H, VS-SI diamonds. Jewelers note steady engagement and bridal demand but some caution among consumers.
Belgium: Sentiment relatively weak. Some improvement since Hong Kong show but polished prices continue to soften. Suppliers trying to hold out until August vacation period. Steady demand for commercial-quality, 0.90 to 1.20 ct., F-H, VS-SI2 diamonds. 10 ct.+ weaker. Liquidity concerns as banks tighten lending. Rough trading slow and premiums slightly reduced since De Beers June sight. Manufacturing and rough dealer profit margins squeezed.
Israel: Polished trading slow. Dealers uncertain about future raise expectations for bourse initiatives to improve trading. Difficult to compete with Indian suppliers on commercial goods as prices soften and profit margins tighten. Suppliers shifting to niche products like fancy color diamonds and large stones. Steady demand for 1 to 1.49 ct., F-H, VS1-VS2 diamonds.
India: Sentiment relatively weak since Hong Kong show. Trading slow during summer months with few foreign buyers in Mumbai. Domestic Indian demand cautious with subdued expectations for IIJS Mumbai show (August 4 to 8). Sellers willing to compromise on price able to sell as buyers push for deeper discounts. Manufacturing steady after rough buying slowed slightly in June. Jewelers concerned post-Brexit gold rally will slow sales and add to costs.
Hong Kong: Market remains challenging with retailers consolidating on sluggish consumer sentiment and slower tourist traffic. China better than Hong Kong but Chinese buyers cautious as yuan currency weakens to five-year low (6.69/$1). Gold demand improving as consumers and investors seek currency hedge. Retailers focused on clearing inventory to improve cash flow and refraining from buying new stock. |
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Rapaport News
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