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Rapaport Weekly Market Comment

Oct 29, 2020 10:30 AM   By Rapaport News
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Sentiment mixed as Nov.-Dec. holiday season begins amid continued rise in Covid-19 cases. Dealer trading slow as manufacturers focus on direct supply to jewelers. E-commerce supporting retail market. Adobe predicts online holiday sales +33% to $189B. LVMH takeover of Tiffany back on at lower price of $131.50 per share ($15.8B). Blue Nile debuts synthetics with De Beers’ Lightbox brand. Sotheby’s NY brings in $18M (83% by lot), with pear-shape, 12.38 ct., fancy pink, VVS2 diamond going for $4.2M ($373,337/ct.). Petra Diamonds FY1Q revenue +33% to $82M. Letšeng 3Q sales +67% to $61M, average price +56% to $2,215/ct. De Beers, Alrosa extend supply contracts to March 31.

Fancies: Reduced inventory supporting prices for 1.50 ct. and larger fancy shapes. Ovals and Pears strong in 1.50 to 5 ct., G-K, VS-SI categories. Emeralds doing well in VVS-VS. Princesses improving. Excellent cuts and nice shapes in demand and selling at premiums. Dealers hoping for increased 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: Demand improving as retailers prepare for the holiday season. Memo market very active as jewelers try to avoid owning too much inventory. Tiffany ad campaign boosting interest in square-shape engagement-ring stones. Larger companies doing better than smaller dealers who don’t have the network to sell remotely. Online sales expected to drive growth in November-December shopping period.

Belgium: Cautious mood amid new restrictions following alarming rise in Covid-19 infections. Businesses still operating with reduced staff. Focus on exports to US and China. Europe weak. More supply gradually becoming available to fill shortages. Steady demand for 1 to 1.50 ct., D-H, VVS-VS goods. New proposed banking law aims to help diamantaires open accounts.

Israel: More traffic in bourse after lockdown lifted, but dealer trading slow. Growing inventory of 0.30 to 0.70 ct., D-H, IF-VS2 diamonds due to increased manufacturing and shift in demand to lower colors. SIs also improving. Yoram Dvash will not seek reelection as Israel Diamond Exchange president in order to focus on role at World Federation of Diamond Bourses (WFDB).

India: Gradual improvement as large manufacturers focus on exports for the US and China holidays. Polished production levels continue to climb, enabling greater flow of goods to the market. Businesses planning shorter Diwali break to fill seasonal orders. Increasing demand for 0.30 to 1 ct., I-J, IF-VS diamonds after sharp recovery in D-H prices since April. Suppliers cautious about giving extended credit terms.

Hong Kong: Very few foreign dealers in the market as travel restrictions remain in place. Retail still slow due to lack of tourists and weak local consumer sentiment. Early Christmas promotions starting. China strong. Rising expectations for 11/11 Singles’ Day, with accelerated shift to online sales. 
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