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Rapaport Weekly Market Comment

May 26, 2022 10:00 AM   By Rapaport News
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News: Polished trading sluggish but suppliers to large jewelry retail brands doing well. Expectations rising for June 8-13 Las Vegas shows with dealers relying on US market to stimulate growth. Chinese buyers cautious amid slow retail sales. High inflation, Russia supply constraints and Chinese Covid-19 restrictions fueling uncertainty. Melee hot as lack of Alrosa supply creating shortages. India April polished exports -3% to $2.2B, rough imports -23% to $1.3B. Richemont FY jewelry & watch revenue +49% to $11.7B, operating profit +65% to $4B. Christie’s HK sells $56.3M (86% by lot), with rectangular, 3.06 ct., fancy vivid blue, IF, Moussaieff diamond ring going for $4.9M ($1.6M/ct.).

Fancies: Market slowing. Supply shortages supporting prices. 1.20 to 3.99 ct., F-J, VS-SI is hottest category. Oval is leading shape, followed by 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. Chinese demand helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Trading seasonally slow as dealers prepare for Vegas shows. Difficult to fill orders for fine-quality melee due to shortages and high prices. Stable memo demand for 1 to 2 ct., G-J, VS-SI; manufacturing sector offering deeper discounts as more goods become available. Retail sentiment mixed amid positive sales momentum but concerns rising over impact of inflation. Bridal segment driving activity.

Belgium: Large traders busy and focused on filling US orders. Medium-to-smaller players hoping JCK Show will boost activity. Single-stone buyers cautious due to market slowdown. Not enough rough available, leading to scarcities in lower sizes. Rough demand strong on secondary market in absence of Russian production.

Israel: Market mood varied. Caution fueled by uncertainty over Russian supply, US economy, and Chinese slowdown. Large suppliers to US and European retail brands doing well. Difficult to find top-quality diamonds; lots of less desirable stones available and sent out on memo. Single-stone buyers looking for goods but lacking urgency and are hesitant to pay current prices.

India: Seasonal slowdown in trading and manufacturing as workers gradually return from vacation. Rough scarcities causing shortage of small polished. Some cutters shifting to lab-grown to fill supply gaps and keep workers busy. Demand for dossiers sluggish. 1 to 2 ct., D-J, VS-SI, 3X stable. Weak rupee fueling uncertainty but helping exporters.

Hong Kong: Business improving as coronavirus spread declining. Steady local demand for 0.30 to 0.80 ct., D-I, VVS-SI2 and 1 ct., D-H, VS-SI2 diamonds. Jewelry retail picking up but consumers focused on lower price points. Retail inventory is low and supply is tight. Mainland China cautious following recent lockdowns. Pandemic continues to influence consumer sentiment.
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mr martin rapaportMartin Rapaport at JCK Las Vegas
Jun 23, 2022
Lower rough supply due to the Russia situation may be a “blessing” given the pressures on retail spending,
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