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November 5, 2015

Nov 5, 2015 10:00 AM   By Rapaport News
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RAPAPORT... Diamond trading improving but very cautious as India closes for Diwali. Shortages of the finest select goods helping to stabilize the market with improvement in U.S. memo demand as holiday season approaches. HK very weak with slight improvement in Chinese consumer demand. 1ct. Oct. RAPI -1.3% with some signs of stabilization as manufacturing activity plummets and factories close for Diwali. Rough demand very weak during De Beers Nov. sight. U.S. retail consolidation deepens as JBT reports 276 jewelry business closures in 3Q. HK 3Q polished imports -20% to $4.2B. Israel 3Q polished exports -33% to $918M. The Rapaport Group wishes all our friends a happy, enlightening Diwali.

Fancies: Demand soft. Pears, Ovals and Cushions steady, Princess, Hearts slow. Prices for curves improving slightly. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1-carat. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.

United States: Trading slow with weak buyer interest as dealers try to hold steady prices. U.S. has become a memo market with dealer action limited to replacement. Market worried about lack of overall demand as dealers have oversupply of unsellable goods. Fair to good demand for round, 1ct., G-J, SI-I1 diamonds. 2-3ct. Ovals strong. Cushions, princess hard to sell. Retailers selling much better than dealers with good opportunities for independents who survive the downturn amid consolidation. Rising expectations for holiday season.

Belgium: Polished market quiet with dealers lacking confidence and customers. Some U.S. specific demand for specific goods but Europe and Far East still very quiet. Improvement expected after Diwali with many Antwerp-based Indian dealers taking time off for the festival. Manufacturers looking to buy polished rather than cut rough which is too expensive. Some shortages in nice VS-SI, RapSpec A2+ (3X, none) goods, due to reduced manufacturing. Rough trading very slow during sight week.

Hong Kong: Some improvement in trading with dealers starting to fill Chinese New Year orders. Some demand for 1-2ct., G-J, VS-SI, 3X diamonds with Mainland China better than Hong Kong. Jewelers avoiding inventory build-up but may need specific goods that are in short supply for the Chinese New Year. Rising expectations for the season as government data suggests Chinese retail resisting economic slowdown.

India: Steady activity with buyers looking for goods before next week’s Diwali break (Nov. 7-13). Some demand for GIA-dossiers 0.30-1ct., D-H, VS-SI, RapSpec A2+ (3X, none) diamonds. Steady demand from U.S. and slight improvement in China / Hong Kong orders. Rough demand weak as manufacturing activity remains low. Many factories closing early for the festival. Focus shifting to local retail market with good gold demand projected during the holiday. Trade hoping generic marketing campaigns will improve local diamond jewelry sales.

Israel: Slight improvement but trading is below pre-holiday expectations. Demand is very specific and some orders are difficult to fill due to shortages. Dealers expect shortages to drive short-term demand, particularly for top-quality, RapSpec A2+ (3X, none) diamonds. Suppliers holding large inventory of lower quality goods that are difficult to sell. Good buying opportunities for large firms with cash and strong marketing capacity.
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