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Rapaport Weekly Market Comment
Aug 27, 2020 11:31 AM
By Rapaport News
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Sentiment improving as US and Chinese jewelers gain confidence ahead of holiday season. Rough sales rise due to polished shortages and lower prices. Sight goods selling at premiums on the secondary market after De Beers reduced prices 6% to 8% for 1 ct. rough and larger. Concerns that strong rough buying will squeeze liquidity and lead to polished oversupply. Polished demand selective, with wide availability of difficult-to-sell inventory. Good demand for 0.50 ct., G-I, SI2 diamonds. Engagement ring segment supporting the market. Tiffany & Co. 2Q sales -29% to $747M, profit -77% to $32M. India July polished exports -39% to $918M, rough imports -79% to $212M.
Fancies: Reduced inventory supporting prices for select fancy shapes. Ovals and Pears strong in 1.50 to 2 ct., G-K, VS-SI categories and 3 to 5 ct. SIs. Very fine fancy cuts selling at a premium. Rising orders in China helping the market. Excellent cuts and nice shapes in demand. Dealers hoping for improved sales of fancy-shape engagement rings as consumers seek alternative designs at lower cost. High availability of fancies below 1 ct. Off-make, poorly cut fancies illiquid and difficult to sell.
United States: Dealers starting to get more calls, although trading volumes are well below pre-coronavirus levels. Demand has narrowed, with steady interest in 1 to 2.50 ct., G-H, VS-SI (RapSpec A3) for the bridal market. Shortage of melee sieve size -11, G-H, VS-I2 goods. Retailers more optimistic for holiday season than before, but still focused on engagement ring segment.
Belgium: Markets officially returning from vacation period, with bourses set to reopen on Monday (August 31). Sentiment improving. Stronger dealer activity on rough market during sight week. Some concern about large volume of rough sales in August.
Israel: Polished trading quiet. Activity restrained due to limited demand during pandemic and to dealers taking summer vacation. Suppliers looking for goods to fill selective orders from US and China, with steady interest in 0.30 to 0.50 ct., D-G, VS-SI, RapSpec A3+ goods. Rising expectations for holiday season as jewelers make inquiries.
India: Dealers and manufacturers gaining confidence as business gradually returns. Polished production increasing but still below capacity since many workers have not come back to Surat. Profit margins improving for 0.30 to 2 ct. goods, as prices have firmed and De Beers reduced rough prices for 1 ct. and larger. Shortages of popular polished categories due to low manufacturing levels in past six months and rising US and Chinese orders. Local industry leadership cautions trade to focus on rough that will yield in-demand polished.
Hong Kong: Low activity during summer period, but positive sentiment growing as third-wave coronavirus outbreak contained. Luxury retailers under pressure amid slump in tourist traffic. Rising Chinese demand supporting the market. Dealers optimistic about China jewelry sales for remainder of the year. Solid interest in 0.30 to 1.50 ct., D-K, VVS-SI2 diamonds. Fancy-shape sector strengthening, especially 1 to 2 ct. pears and emeralds.
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Tags:
Rapaport News
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