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Rapaport Weekly Market Comment

Mar 28, 2019 10:59 AM   By Rapaport News
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Sentiment weakens after soft first quarter. Dealers avoiding large inventory purchases, and manufacturers reducing supply. Miners bracing for tough year as first-quarter sales decline an estimated 30%. Rough market under pressure, with some analysts optimistically predicting flat rough prices in 2019. Sightholders hoping profit margins will improve after next week’s sight. Baselworld announces price cuts and changes to diamond section, after smaller 2019 show. Alrosa estimates 2018 global diamond-jewelry sales +4% to $85.9B. Tiffany 2018 revenue +7% to $4.4B, profit +58% to $586M. US 2018 polished imports +8% to $23.3B. GIA to introduce polished-diamond country-of-origin report.

Fancies: Fancy shapes stable, driven by US and European demand. Ovals for fashion jewelry in good demand. Supply shortage supporting prices for Pears, with 1.50 ct. the strongest category. Radiants improving. Marquises and Princesses weak, despite reduced manufacturing. Excellent-cut Ovals, Cushions, Pears and Emeralds doing well, with steady orders for fine-quality goods in 6 to 10 ct. Chinese consumers seeking fancy shapes at better prices. US sustaining 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: Dealer trading slow as retailers are increasingly cutting out the middle man. Demand specific, with steady interest in 1 ct., G-J, VS2-I1 diamonds. Goods below 0.50 ct. and above 3 ct. weak. Ovals selling well at wholesale and retail. Jewelry sales stable, with strong emphasis on engagement and bridal ahead of summer wedding season.

Belgium: Sentiment weak, with little excitement about the Basel show. Buyers are selective, filling specific orders and avoiding large inventory purchases. New goods selling well, with shortage of top-select-quality diamonds due to lower production. Steady demand for 1 ct., G-H, VS-SI goods. Rough trading quiet, with long gap between February and April sights.

Israel: Polished trading quiet, with slowdown in 2 to 5 ct. sizes. Mid-scale companies struggling more than large and smaller entities, which are better at navigating unpredictable markets. Focus shifting back to US, with good demand for RapSpec A3, 3X, eye-clean SIs. Fancy-shape prices supported by low supply rather than strong demand. Pears and ovals hot in 1.50 ct., F-G, VS.

India: Domestic market slow, with fewer overseas dealers in Mumbai. Buyers pushing for deeper discounts on diamonds below 0.50 ct. and above 3 ct. Good US and Chinese demand for nice SIs. Liquidity tight as dealers settle accounts ahead of March 31 financial year-end. Manufacturers maintaining low polished production, after reduced first-quarter rough purchases.

Hong Kong: Wholesale trading slow after Chinese New Year season, with economic uncertainty fueling caution for upcoming May 1 holiday. China retail improving as consumers are choosing to spend locally rather than abroad. Momentum continues for 1 ct., D-I, VS-SI. Shortage of nice SIs causing shift to better clarities. 0.30 to 0.50 ct. dossiers moving better as prices continue to soften.
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