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Rapaport Weekly Market Comment

Sep 7, 2017 11:00 AM   By Rapaport News
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Trade focused on important Hong Kong show starting next week as Far East retail shows signs of recovery. Polished market facing financial difficulties in India and weak demand as Aug. 1 ct. RAPI -0.6%, 0.30 ct. -1.4%, 0.50 ct. -2.3%, 3 ct. +0.3%. Rough slow, with low premiums on secondary market. De Beers sells $505M at Aug. sight after early Diwali brought demand forward to July. Alrosa 1H revenue -17% to $2.7B, profit -46% to $848M due to strong ruble and weaker product mix. Dominion 2Q sales +50% to $240M, profit of $31M vs. loss of $38M a year earlier.

Fancies: Ovals selling well in US. Pears and Cushions steady. Squares soft, with declining interest in Princesses. US demand supporting market for commercial-quality, medium-priced fancies for sizes under 1 ct. Selective buyers of large, fine-quality fancy shapes facing limited supply. Far East demand improving as consumers seek fancy shapes at better prices. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: Markets returning to normal after long Labor Day weekend. Trade has picked up since the summer, with attention now turning to Hong Kong show. Market sentiment improving, with better demand for 3 ct. and larger diamonds. Rising hopes for holidays amid increased spending on diamond marketing and improved sales at major retailers.

Belgium: Market mixed, with shortages and limited demand. Dealers returning from summer vacation, with sales below expectations for this time of year. Good demand for 0.30 to 0.40 ct., F-H, SI, triple Ex, no fluorescence. Shortages of SI goods. Rough trading slowed after buoyant 1H, creating concern among traders.

Israel: Market uncertain amid fears a sluggish Hong Kong show could result in reduced polished demand. Companies buying at slow pace across categories. Weak demand for rounds up to 1 ct., with 3 ct. and higher quiet, especially in Far East. News of Indian defaults creating concern among traders. Decline in demand hitting rough sector. Israel Diamond Exchange to lease vacant bourse space to non-traders.

India:
Market cautious amid reports of diamond companies in financial distress. Manufacturers reducing polished production to below capacity in response to oversupply and weak demand. Trading activity limited as dealers focus on preparations for Hong Kong show. Indian Commodity Exchange (ICEX) launches diamond-futures trading for 1 ct., H, VS2.

Hong Kong: Dealer activity slow as industry readies for show. Trading quiet at end of summer season. Jewelers looking to increase inventory levels at show ahead of holidays but seeking discounts. Dealers optimistic about retail recovery as Hong Kong July sales of jewelry and other valuable gifts +13% to $791M, January-to-July sales +2.5% to $5.3B. Macau 2Q retail sales of watches, clocks and jewelry +25%.
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