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Rapaport Weekly Market Comment

Jul 7, 2022 10:00 AM   By Rapaport News
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News: Polished trading seasonally slow due to US summer vacations. Economic uncertainty fueling caution. Shift in sentiment with buyers setting market terms and polished inventories rising despite sanctions on Russian rough. 1 ct. RAPI -1.8% in June. Rough shortages expected to support prices in 2H. Expectations for strong De Beers sight next week. Kimberley Process reports 2021 global rough production +51% to $13.98B, volume +12% to 120M cts., average price +35% to $117/ct. Petra Diamonds’ price index +8% at $93M June tender. India raises goods and services tax on polished to 1.5%. Birks FY sales +27% to $141M, profit of $1M vs. $4.5M loss. G7 countries ban gold imports from Russia.

Fancies: Market stable. Supply shortages of well-cut fancies supporting prices. 1.20 to 3.99 ct., F-J, VS-SI is hottest category. 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: New York trading slower due to July 4 long weekend and as many dealers take two-week vacation. Steady demand for 1 to 3 ct., D-H, VS-SI goods. Bridal supporting the market during summer wedding season amid boom in post-pandemic nuptials. Jewelers optimistic for second half despite economic headwinds.

Belgium: Market stable. US demand steady, but uncertainty about Asia as China still navigating effects of lockdowns. Rising concerns about impact of Russia crisis on rough supply. Continued frustration with local banks blocking diamond accounts. Transparency International calls on European Union to cease diamond trade with Russia.

Israel: Sentiment weakening as trading has slowed since upbeat Las Vegas shows. Buyers increasingly resistant to prices. Demand for dossiers softening. Mixed performance in fancy shapes, with pears and ovals stronger than emeralds and cushions. Israel June polished exports +10%; rough imports -14% as Russian supply declines.

India: Trading cautious amid rough shortages and varied polished demand. Melee market steady. Fewer US orders during summer period. Depreciation of rupee to INR 79/$1 increasing importers’ sourcing costs and reducing profit margins. Trade welcomes GST hike from 0.25% to 1.5% as companies will be able to deduct larger amounts from tax liabilities. Manufacturers operating below capacity due to low supply and market uncertainty.

Hong Kong: Market seasonally slow, with activity not fully recovered from Covid-19 disruptions. Consumers showing greater preference for gold than diamonds. Hong Kong retail sales of jewelry, watches, clocks and valuable gifts +7% in May as economy reopens and government distributes spending vouchers. Mainland China business slow.
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