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Rapaport Weekly Market Comment

Oct 22, 2020 10:30 AM   By Rapaport News
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Sentiment improving as holiday orders and shortages support polished prices. Cutters planning brief Diwali break amid rise in production. US holiday shoppers expected to keep spending in line with last year at average of $998, says NRF. Jewelers with strong digital presence doing well. Fewer 3Q bankruptcies than expected as JBT reports US industry decline of 3% to 24,258 businesses. China strong. Chow Tai Fook 2Q mainland sales +21%, Hong Kong -52%. LVMH 3Q jewelry & watch sales -14% to $1.1B. Miners’ rough inventory increasing: De Beers 3Q production -4% to 7.2M cts., sales -11% to 6.6M cts. Alrosa 3Q revenue -4% to $589M, price index -7%. Chaim Pluczenik elected AWDC president.

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. Princesses improving. Excellent cuts and nice shapes in demand and selling at premiums. Rising orders in China helping the market. 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: Sentiment mixed. Rate of recovery varying according to type of goods and digital strategy. Pandemic has intensified split between omni-channel and offline retailers. Holiday demand rising. Emphasis on memo supply. Steady bridal sales ahead of engagement season. Dealers struggling to replace popular goods. Estate jewelry moving well.

Belgium: Government tightening restrictions as coronavirus infections rise. Concerns about impact on local diamond businesses. Travel restrictions preventing traders from sourcing goods. Sustained orders for 0.50 to 0.90 ct. and 1 ct., E-G, VVS-SI (3X) diamonds. Weaker demand for larger stones. Yellow and pink diamonds improving.

Israel: Market quiet despite lifting of nationwide lockdown. Bourse reopens trading halls with restrictions on capacity. Companies holding old inventory; fresh goods hard to source and selling fast. Steady demand for 1 ct., D-H, VS-SI diamonds.

India: Holiday orders from US and China driving business. Shortages supporting prices for 1 to 2.99 ct. diamonds. Polished production continues to rise. Manufacturers planning shorter Diwali break amid rush to fill seasonal demand. Growing interest in lower colors. Domestic sales up as Indian festival period approaches, signaling start of wedding season.

Hong Kong: Local market quieter than usual in lead-up to Chinese New Year. Luxury sales limited as tourism remains slow. Mainland demand improving as consumers shop domestically. Hong Kong-based jewelers seeing mixed results. Chow Tai Fook thriving in China but Luk Fook struggling. Strong spending outlook for affluent Chinese.
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