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Rapaport Weekly Market Comment

Jun 27, 2019 10:58 AM   By Rapaport News
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Sentiment weak amid ongoing liquidity concerns. Polished production reduced by estimated 30% in 2019 due to high inventory, sluggish demand and tight manufacturing profits. Recent rough-price cuts not enough to reboot the market. De Beers June sales slump 33% to $390M, 1H sales -18% to $2.4B. Quiet Hong Kong fair highlights show fatigue and cautious Far East demand as geopolitical tensions fuel economic uncertainty. Gold rallies +8% to $1,402 an ounce (June 1-27) as investors seek assets with store of value. Belgium May polished exports flat at $1.2B, rough imports -16% to $761M. India May polished exports -15% to $1.9B, rough imports -35% to $1B. Tara Jewels files bankruptcy.

Fancies: Fancy shapes soft, reflecting slowdown in high-end demand. 3 to 8 ct., I-K, VS-SI1 moving better than rounds as dealers and consumers shift to lower price points. Well-known brands are paying the strongest prices, as are buyers with specific requests. Ovals for fashion jewelry moving well, especially VS2-SI2. Demand for Radiants and Emeralds down. Marquises and Princesses weak despite reduced manufacturing. US sustaining market for commercial-quality, medium-priced fancies under 1 ct. Chinese consumers seeking fancy shapes at better prices. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: New York market slow ahead of summer break: Diamond Dealers Club to close June 28 to July 9. Steady flow of memo calls, but jewelers not buying for stock. 1 ct., G-J, SI-I1, RapSpec A3+ selling well. Bridal supporting retail sector during wedding season, but concerns consumers are reducing engagement-ring spend. Vintage designs popular and selling better than modern styles.

Belgium: Polished trading quiet, as dealers return from disappointing Hong Kong Jewellery & Gem Fair. Suppliers cautious about giving credit, and are offering better cash prices. Stable demand for 1 ct., G-I, VVS, RapSpec A3+. Ovals and pears improving, but other fancy shapes weak. Rough market cautious after De Beers sight, with rough below 4 ct. selling at a loss among dealers.

Israel: US-focused memo houses doing well. 1 to 3 ct. goods in demand: the lower the clarity, the better the market. Large-stone dealers uncertain as they struggle to maintain price levels. Suppliers to Far East lacking orders, with Hong Kong show doing little to boost sentiment. Top-make fancy shapes hard to find. Rough dealers cautious.

India: Sluggish activity and weak sentiment amid persistent bankruptcy rumors. Buyers looking for bargains and sense suppliers are under pressure. Cutters despondent due to low profitability, even after rough-price cuts. Manufacturers reducing production or shifting to low-cost items to keep workers occupied. Polished inventory levels high, but shortages emerging in popular categories such as top-make SIs (3X, no-fluorescence).

Hong Kong: Last week’s show very quiet. Dealers more interested in larger September fair, but maintaining cautious outlook for 2H. Political protests and trade war affecting business, with Chinese buyers staying away. Dealers focused on dossiers, with steady demand for 0.30 to 0.50 ct., F-J, VS-SI, RapSpec A3+. Jewelry retail slowing after solid fiscal year ending March 31.
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