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Rapaport Weekly Market Comment

Aug 4, 2022 10:00 AM   By Rapaport News
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News: Diamond market quiet. Deep concerns about trading slowdown and prospects for 2H. US retail steady; jewelers cautious about buying large amounts of inventory. China sluggish amid rising geopolitical tensions and economic uncertainty. Mumbai IIJS show opens with spotlight on domestic jewelry market, exchange rate volatility, and rough supply. Rough trading stable as Alrosa’s isolation spurs demand for non-Russian production. Miners and service providers accelerating source-verification programs. Lucapa 2Q revenue -36% to $22M, recovers 170 ct., type IIa pink at Lulo mine. Asian Star 1Q sales +45% to $159M, profit +4% to $2.7M. GIA to open Dubai lab. AGTA appoints John Ford as CEO.

Fancies: Market has cooled for 0.30 to 1.20 ct. diamonds. Supply shortages of well-cut fancies supporting prices. 1.20 to 3.99 ct., F-J, VS-SI goods stable. Oval is leading shape, followed by Radiant, Emerald, Pear, Cushion and Marquise. Retailers offering broader product ranges as consumers seek alternative cuts. Growing interest in fancy-shape engagement rings. Oversizes trading at higher prices than usual. Excellent shapes commanding premiums. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Activity improving after last month’s seasonal slowdown. Inflation has split retail market: Wealthy still spending on luxury goods, but middle-class Americans prioritizing essential purchases. Steady demand from high-end jewelers as industry starts to prepare holiday inventory. Solid movement in 3 ct. and larger, F-H, VS-SI categories. Weaker appetite for 1 to 2 ct., G-I, SI-I1 diamonds destined for lower-income consumers.

Belgium: Bourses shut for summer. Traders uncertain about second half due to US and China volatility and high rough prices. GIA Antwerp lab closes amid limited demand.

Israel: Trading quiet during vacation period and decline in global orders. Locals reluctant to buy as overseas clients reduce their inventory needs. Country’s polished exports drop 7% year on year to $296.6 million in July; rough exports fall 10% to $127.9 million.

India: Demand down amid uncertainty in US market and ongoing weakness in China. Prices for certified diamonds have slid in rounds and fancy shapes. Parcel goods also slow. Polished production still low as high rough costs continue squeezing manufacturing margins. Many hoping India International Jewellery Show (IIJS) will kickstart trading.

Hong Kong: Activity sluggish amid summer lull and lack of cross-border travel. Slow trading at recent Hong Kong International Jewellery Show; few foreign businesses were present. Government consumption vouchers having limited impact on luxury sector. June retail sales of jewelry, watches, clocks and valuable gifts up 2.3% year on year at HKD 3.39 billion ($431.2 million), but market losing steam compared to previous months. Stores shifting to online focus as in-person traffic declines.
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