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Rapaport Weekly Market Comment

Aug 29, 2019 10:58 AM   By Rapaport News
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Suppliers preparing for Hong Kong show amid uncertainties about buyer attendance. Weak Chinese sentiment due to trade war and yuan depreciation (-4% in Aug. to CNY 7.1/$1). Tourist spending declines, with Tiffany & Co. 2Q sales -3% to $1B, earnings -6% to $136M. Chow Sang Sang 1H retail revenue +1% to $1.1B, profit +2% to $78M after strong start to 2019, but double-digit slowdown when Hong Kong protests began in June. Inventory levels declining due to reduced manufacturing, despite sluggish polished trading. Rough market very quiet after $280M De Beers sight. Trans Hex CEO Llewellyn Delport resigns as mid-scale miners struggle to stay afloat in current weak market.

Fancies: Fancy shapes soft, reflecting slowdown in overall 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 highest 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: Sentiment weak amid selective polished demand and shift to lower qualities. Steady memo calls for 1 to 2.50 ct., G-H, VS2-SI1 goods. Fancy-color dealers holding sizable inventory of large yellow diamonds. Trade war and volatile stock market affecting consumer and business confidence. Concerns about increased jewelry-sourcing costs ahead of September 1 China tariff hike.

Belgium: Trade not yet out of vacation mode. US inquiries steady, but orders seasonally sluggish. Chinese demand slow. Businesses cautious about attending Hong Kong show. Decline in rough-dealer activity after small De Beers and Alrosa August sales.

Israel: Bourse quiet as dealers return from summer break. Suppliers focused on US as 4Q selling season approaches. Steady market for 1 ct., G-H, VS2-I1 RapSpec A3+ goods. Not easy to source best-quality SIs, which are in demand. Low expectations for Chinese demand at Hong Kong fair.

India: Activity subdued, with many businesses closed for Jain Paryushan festival. Some US, Chinese and Israeli buyers looking for bargains from cash-strapped Indian suppliers. Polished inventory starting to decline due to reduced manufacturing. Still a lot of available lower-quality goods — brown, green, milky (BGM) and diamonds with fluorescence — that are not easy to sell. Dealers considering supply requirements ahead of US holiday season.

Hong Kong: Slow market as protests continue to affect commerce. Show organizers trying to calm exhibitor concerns about upcoming fair, which begins September 16. Trade war and yuan depreciation affecting China demand. Steady orders for 0.30 to 0.50 ct., F-I, VS-SI goods. Weak interest in 1 ct.+, D-F, IF-VVS stones.
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