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Rapaport Weekly Market Comment
May 14, 2020 11:02 AM
By Rapaport News
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Diamond companies slowly resuming operations. Focus on China and Hong Kong as exports recommence. Some US retailers opening amid significant changes to customer engagement in new digitized, low-touch economy. Major jewelers returning memo inventory and trying to revise supply agreements to include longer payment terms. Dealer market facing liquidity crunch. Rough trading at a near standstill, with enough goods available to satisfy 2Q and 3Q demand. Alrosa in talks to sell $500M-$1B of rough to Gokhran as April revenue -95% to $16M. De Beers launches e-commerce platform for rough sales. Belgium April polished exports -84% to $132M, rough imports -84% to $126M. Rapaport announces certified diamond auction June 8-10 with delivery to Hong Kong.
Fancies: Fancy shapes sluggish amid lockdown of US retail. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.
United States: Retailers gradually reopening stores as restrictions ease in some states. New York diamond district still shut. COVID-19 crisis accelerating shift to online spending. E-commerce sales up 49% in April compared to previous month, according to Adobe Analytics. Sotheby’s and Christie’s reconsidering June New York Magnificent Jewels auctions while offering more high-end diamonds and jewelry on virtual platforms. Christie’s expects $1M-$2M for emerald-cut, 28.86-carat, D, VVS1 at its next Jewels Online sale.
Belgium: Trading halls and customs resume activity, fueling some hope for improved business as diamantaires return to their offices. Dealers still cautious as sales volumes remain low. Weak US demand and concerns about second wave of coronavirus infections in Far East creating challenges for polished suppliers.
Israel: Economy cautiously reemerging from shutdown. Trading remains slow due to constraints on major retail markets. Israel Diamond Exchange calls for government support of the industry. Bourse repurposes International Tender Center as safe working room for members during coronavirus.
India: Countrywide lockdown still in place. Authorities allow Mumbai diamond and jewelry companies to resume operations, with social distancing measures restricting workforce to 10%. Exports have also recommenced, mainly to Hong Kong. Manufacturing limited; some factories given special dispensation to operate. Voluntary suspension of rough imports to take effect on May 15.
Hong Kong: Economy continues to reopen. Hong Kong becomes the major post-coronavirus diamond trading center. Large shipments of diamonds coming in from India, which is still in lockdown. Polished imports fell 54% to $2.3 billion in first quarter. Some concern about potential second wave of COVID-19 infections, but retail slowly improving amid new social distancing measures. Chinese consumers focused on daily necessities rather than dining, tourism or luxury spending.
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Tags:
Rapaport News
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