Rapaport Weekly Market Comment

Sentiment weak due to slump in demand since early March. Some orders from China and Hong Kong, but US and European markets remain in lockdown. Dealers frustrated by inability to resume trading. Indian industry groups call for one-month suspension of rough imports beginning May 15 in effort to ease liquidity and deplete existing polished inventory. Mid-tier miners under pressure with weak prospects to generate cash required for debt payments. Dominion files for insolvency protection. De Beers 1Q sales volume +19% to 8.9M cts.; lowers 2020 production guidance to 25-27M cts. as Debswana mines on care and maintenance in April. JBT anticipates spike in closures after US jewelry trade shrinks 4% to 24,280 businesses in 1Q. JCK Las Vegas and Luxury 2020 shows canceled. Yoram Dvash elected acting WFDB president as Ernie Blom steps down. Rapaport Flash Sale Jewelry Auction – Tuesday, May 5 and Wednesday, May 6.

Fancies: Fancy shapes sluggish amid lockdown of US retail. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Businesses under pressure as retail stores and diamond trading centers remain closed. Concerns about pending wave of bankruptcies. Jewelers Board of Trade reports many companies discontinued in the first quarter. Cancellation of JCK Las Vegas and Luxury shows reflects weak outlook for rest of the year.

Belgium: Bourses remain shut while Europe battles coronavirus. Rough market at a standstill. Polished shipments slump in March with exports to US down 47% to $152 million, but demand from Hong Kong showing signs of recovery.

Israel: Sector quiet as overseas retail remains shut. Bourse trading floor closed until further notice. Government partially relaxes restrictions on movement but still limiting business activities and advising people to stay at home. Rapaport Single Stone Auction in Israel April 22-27.

India: Manufacturing and trading on hold as country remains under lockdown. Surat polishing industry and Bharat Diamond Bourse shut until May 3 at the earliest. Rupee slumps to record low of $76.88/$1, putting additional pressure on domestic demand.

Hong Kong: Gradual resumption of activity but diamond trading slow due to shutdowns in other diamond centers. Hong Kong retail quiet amid drop in tourism and weak local sentiment. Luk Fook same-store sales down 57% in three months ending March 31.