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Rapaport Weekly Market Comment

Jul 29, 2021 10:30 AM   By Rapaport News
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Diamond market quieter as Belgium and Israel trades take vacation. Sentiment positive and prices firm. Dealers seeking opportunities and gaining confidence to buy at higher price levels. US retail recovery driving demand. Polished inventory rising following high-volume 1H rough purchases. RapNet listings exceed 1.5 million diamonds for first time since March 2020. Supply shortages persist due to India production delays. Alrosa buys Gokhran rough to fill supply quota, raises prices estimated 7%. De Beers 1H revenue +138% to $2.9B, earnings of $267M vs. loss of $214M, price index +14%, July sight valued at $510M. LVMH 1H jewelry and watch sales +205% to $4.7B, profit of $935M.

Fancies: Market robust. Prices firming across most sizes and categories amid shortages and growing fancy demand. Retailers offering wider product ranges as consumers seek alternative shapes. Dealers seeing increased sales of fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds, Princesses, long Radiants and Marquises. Ovals and Cushions closing price gap with Rounds. Oversizes trading at higher prices than usual. Excellent cuts popular and commanding premiums. Steady orders in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Market doing well despite summer lull. Strong demand for fancy shapes, with radiant and elongated ovals, 1 to 2.50 ct., F-I, SIs the best category. Fancy colors also improving. Jewelers selling more than average for this time of year, with movement across a diverse range of goods. Some concern that Covid-19 Delta variant will disrupt retail momentum.

Belgium: Trading slower as summer vacation period begins. Bourses to close August 2 to 22. European luxury houses make strong recovery, with breakout 1H jewelry sales. Rough market calmer than two weeks ago. Alrosa and De Beers goods still selling at healthy premiums on the secondary market.

Israel: Reduced activity due to summer break; suppliers maintaining firm prices. Buyers slowly adapting to higher price levels, but some caution remains. Dealers competing for goods to fill orders amid shortages in some categories. US demand driving the market, with good appetite for 1 ct., G-H, VS-SI diamonds.

India: Mumbai trading mixed, with major exporters doing better than small and midsize companies. Steady US orders; Hong Kong and China slower. Local demand improving ahead of upcoming festivals. Large-scale manufacturers raising polishing production, but scarcities persist due to high rough prices, labor shortages, and delays at the Gemological Institute of America (GIA). Volatile rupee-dollar exchange rate adding uncertainty.

Hong Kong:
Wholesale market seasonally slow. Steady demand for 0.30 to 1 ct., D-J, VS-SI2 diamonds. Goods above 3 ct. weak. Hong Kong International Jewellery Show (July 25 to 29) very quiet despite organizers’ promotional efforts; Chinese buyers limited by travel restrictions. Lack of tourists also hurting luxury retailers. 
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