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Rapaport Weekly Market Comment

Jul 4, 2019 10:58 AM   By Rapaport News
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Diamond market quiet as US dealers take vacation. America supporting the trade with steady retail sales and expected boost from Independence Day weekend. Midstream under pressure with tight liquidity, slow orders and excess inventory. Weak sentiment continues as polished prices soften. 1 ct. RAPI -1.4% in June. Manufacturers buying polished rather than rough, as they need to focus on profitability instead of turnover. Buyers taking advantage of suppliers’ need for cash and pushing for discounts. PwC predicts Hong Kong retail sales will slide 5% in 2019 as demonstrations, reduced tourist spending, and trade war affect business. Luk Fook FY revenue +9% to $2B, profit +10% to $193M.

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 best prices, as are buyers with specific requests. Ovals for fashion jewelry moving well, especially 1.50 and 2 ct., G-H, VS and H-K, SI2. 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: Wholesale market quiet, with businesses closed for two-week summer break. Diamond Dealers Club of New York to reopen on July 9. Stable engagement and bridal sales during summer wedding season. Some fashion jewelry promotions over July 4 holiday.

Belgium: Polished market stable for 1 to 1.50 ct., G-J, VS-SI goods. D-F, IF-VVS categories continue to soften. Fancies moving better than rounds, with steady demand from European jewelers. Fancy-color diamonds relatively weak, particularly commercial-quality yellows. Rough trading quiet, with less available supply after small De Beers and Alrosa sales.

Israel: Slow activity with deep concerns about tight liquidity and lower sales. Many dealers have reduced operations in recent years, which has helped shield them from the current downturn. Stable demand for 1 ct., G-J, VS-SI, RapSpec A3+ diamonds. Bourse urges consumers to “love real diamonds” in social media video campaign. Click here for video.

India: Cautious sentiment amid ongoing liquidity concerns and sparse orders. Heavy monsoon rains affecting business, with delays in delivery and worker arrivals. Fewer foreign buyers in Mumbai. Good demand for top-make SIs and lower piqué goods. Manufacturers keeping production 30% to 40% below last year’s levels.

Hong Kong: Trading down due to sluggish demand, slow season and political protests. Steady market for 0.30 ct., D-H, VS-SI, RapSpec A3+ goods, but prices continue to soften. Jewelers putting price pressure on suppliers with liquidity issues. Fewer top-make SIs available. Retail sales sliding due to political protests, reduced tourist spending, and impact of trade war.
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