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Rapaport Weekly Market Comment

January 7, 2015

Jan 7, 2016 11:06 AM   By Rapaport News
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RAPAPORT... Rounds: Polished prices firm, market mood much better and rough demand improving due to polished shortages. Manufacturing still at about 30% below capacity. We advise caution as current market prices are based on shortages created by artificial rough prices that are higher than resultant polished. Rough market volatility expected in 1H as miners reduce prices to increase revenue. Chinese New Year (Feb. 8) demand uncertain with Chinese economy under pressure as Shanghai stock market plummets 12% since Jan. 1 and yuan currency devalued 2%. U.S. steady after relatively positive holiday season. Signet Jewelers reports Nov-Dec. sales +5% to $1.9B. Notice: Rapaport Diamond Specifications updated as of 1/1/16. See www.diamonds.net/Prices/RapaportSpecs.aspx.

Fancies: Pears and Ovals in short supply due to limited production. Emeralds improving. Fairly good market for large top-quality fine-cut fancy shapes but buyers are extremely picky and supply is very tight. Cushions steady, Princess and Hearts slow. Overall fancy shape prices relatively soft. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1ct. 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: Dealers return from New Year vacation optimistic about 2016 but profitability challenges remain. Shortage of RapSpec A2 (3X, none) diamonds on the market. Good demand for 0.30-0.80ct., G-J, SI-I2 diamonds. Still a lot of goods out on memo and dealers unsure how much new inventory retailers will require after Christmas. Overall, retailers positive about the holiday shopping period with some noting a drop in traffic but rise in online buying and sales of larger-ticket items.

Belgium: Better mood in Antwerp than before Christmas-New Year although trading is still cautious. Prices supported by shortages with dealers competing for RapSpec A2 (3X, none) diamonds. Some buyers are shifting away from RapSpec A2 and 3X due to shortages as they find good deals on RapSpec A3 or VG-quality diamonds. Good demand for 0.30-0.50ct., D-J, VS-SI and stable demand for 1ct., G-J, VS-SI diamonds. Steady demand for pears, which are increasingly being used in engagement rings. Rough trading quiet and uninteresting.

Israel: Market stable with much better mood than two months ago. Dealers feel the market has bottomed and there is positive momentum. Prices supported by shortages and U.S. demand. Chinese demand improving but dealers are cautious about China and Hong Kong during the Chinese New Year. Steady demand for RapSpec A2 (3X, none) 0.30-0.99ct., G-J, VS-SI and 1-2ct., D-J, VS-SI diamonds. Fancy shapes stable with relatively good demand and shortages for pears and ovals. Rough trading quiet as dealers note there is a lack of goods and expect prices to soften.

India: Trading improving. Sellers holding the right goods are able to get good prices. Shortages of RapSpec A2 (3X, none) diamonds. Good demand and shortages for 0.30-0.50ct., D-J, VS-SI diamonds. Buyers with orders are looking at lower-qualities (RapSpec A3 and lower) as prices for RapSpec A2 are strong. Rough demand improving but manufacturers maintaining polished production at estimated 30 percent below capacity.

Hong Kong: Trading improving as jewelers prepare for the Chinese New Year (Feb. 8). Shortages in GIA-dossiers supporting prices with good demand for RapSpec A2 (3X, none) 0.30-0.50ct., D-J, VVS1-SI diamonds. Large stone market cautious. Mixed expectations for Chinese New Year. Hong Kong-based retailers concerned that drop in tourist numbers will impact sales. Mainland China more optimistic although this week’s stock market collapse (SSE Composite Index -12% since Jan. 1) may affect consumer sentiment.
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