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Rapaport Weekly Market Comment

Jan 3, 2019 10:59 AM   By Rapaport News
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Happy New Year! Diamond trade ends relatively good year with 1 ct. RAPI +0.7% despite weak 2H. Diamond manufacturers cautious amid expectations of continued midstream consolidation due to bankruptcies and mergers. Dealer market quiet over New Year holiday. Polished suppliers start 2019 with high inventory of small goods up to 0.30 ct. Total diamonds listed on RapNet +24% year on year to 1.5M on Jan. 1. Positive US holiday season sees strong store and web traffic. Retail outlook optimistic, boosted by tax reforms and low unemployment, but stock-market volatility, higher interest rates and US-China trade tariffs may slow luxury spending.

Fancies: Fancy-shape market stable, driven by US and European demand for fashion jewelry. Ovals are best sellers, followed by Emeralds, Cushions and Pears. Supply shortage supporting prices for Pears. Radiants improving. Marquises and Princesses weak. Oversizes selling well. Steady demand for fine-quality 6 to 10 ct. Ovals, Pears and Emeralds, with prices firming for 3 to 5 ct. due to shortages. Chinese consumers seeking fancy shapes at better prices. US supporting market for commercial-quality, medium-priced fancies under 1 ct. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: Wholesale market quiet, with businesses slowly returning from Christmas-New Year vacation. Initial holiday retail reports positive, but growth slower than in 2017. Trading expected to increase in January following decline in inventory levels during holiday season. Consumer confidence fell 7% in December to its lowest level in five months, according to the Conference Board, reflecting concern that economic growth would slow in the first half.

Belgium: Most businesses closed over New Year. Dealers assessing first-quarter inventory needs before bourses reopen on January 7.

Israel: Trading sluggish as suppliers wait for holiday-season results and replacement orders. Israeli dealer-to-dealer activity continues to slow. Cautious outlook for the year amid consolidation and rumors of layoffs. Businesses assessing new tax laws that took effect for the diamond industry on January 1.

India: Polished trading down, with few foreign buyers in the market over Christmas-New Year. Suppliers holding prices firm during lull, but willing to discount on very old stock. Manufacturers raising polished production, but wary due to high inventory levels. Consolidation expected this year as bankruptcy rumors persist. Jewelry sales stable during ongoing wedding season.

Hong Kong: Market quiet, with many dealers on vacation over Christmas and New Year. Preparations under way for Chinese Lunar Festival on February 5. Jewelry manufacturing steady, with orders from the US and China staying strong despite trade war. Tourist arrivals continue, but focus turns to discount shopping rather than luxury.
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