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Rapaport Weekly Market Comment

Jun 29, 2017 11:00 AM   By Rapaport News
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Diamond markets quiet, with select demand for better-quality SIs. Hong Kong show signals improving sentiment among jewelers, but dealers cautious. Rough market stable, with limited De Beers supply supporting prices that are reducing cutters’ profit margins. Manufacturers expected to reduce polished output in 3Q as inventory levels rise. Petra Diamonds cuts production and sales outlook by 9% amid expansion program delays. Firestone raises 2017 Liqhobong production plan +20% to 360,000 cts. Luk Fook FY’17 revenue -9% to $1.6B, profit +7% to $132M. Birks Group FY’17 revenue +0.4% to $287M, profit -9% to $4.9M. Global Witness warns of online schemes to smuggle diamonds from CAR.

Fancies: Ovals have become best-selling fancy shape for US market, with shortage of 3 ct. stones. Cushions gaining popularity. Steady demand for Pears in the Far East. Emeralds improving and selling better than Princesses in larger 2 ct.+ sizes. Some demand for big fancy shapes such as Radiant, 3 ct.+, D-I, SI1-SI2 elongated stones, but buyers extremely picky. Large price differentials between excellent- and average-cut fancies. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: Polished trading slow as dealers prepare for summer vacation. Dealers closing out memos and outstanding payments before the break. Steady demand for 1 to 3 ct., G-J, VS2-SI2 diamonds. Curved fancies stronger than squares, with ovals the hottest item. Retail sales stable, with focus on bridal during summer wedding season.

Belgium: Sentiment weak. Buyers filling immediate needs, but not planning future supply. Rumors of large bankruptcy fueling caution. Dealers stuck with old stock, holding prices firm for more liquid fresh goods. Good demand for RapSpec A2+ SIs, but buyers struggling to find goods at their price points. Steady demand for dossiers. Rough market stable, with good demand for non-De Beers goods.

Israel:
The market is stable as Hong Kong show meets dealers’ low expectations. Steady demand for 0.30 to 1.49 ct., I-J, VS-SI, RapSpec A3+ diamonds, with shortages in some sizes. Large availability in the market, with some good buying opportunities in India. Good Far East demand for lower I-J colors. Rough trading cautious amid tightening profit margins.

India: Polished dealers cautious as US and Far East demand remains sluggish after Las Vegas and Hong Kong shows. Inventory levels rising as rough market remains strong and manufacturing levels at near-full capacity. Expectations that manufacturing will slow in the third quarter. Steady demand for 0.30 to 2 ct., H-J, SI, RapSpec A2+ diamonds. Concerns of negative impact new GST tax laws may have on jewelry sales and diamond trading.

Hong Kong:
Market sentiment improved during this week’s June show. Strong emphasis on new pavilion with finished jewelry that drew large crowds. Diamond section less busy. Buyers cautious and selective, with good demand for 0.30 to 0.40 ct., H-I, VS-SI, RapSpec A2 diamonds. Fancy color diamonds and gemstones generating greater interest. Retail jewelry sales slightly improving.
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