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Rapaport Weekly Market Comment

Jan 23, 2020 10:58 AM   By Rapaport News
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Polished sentiment positive following steady holiday sales. Strong interest in 0.30 ct., D-F, IF-VS1, but high-end 3 ct. and larger weak. Increasing rough demand raising polished-oversupply concerns as large quantities expected to enter market in coming weeks. De Beers lifts prices in some categories at Jan. sight and plans changes to rough buying criteria. De Beers 2019 sales -8% to 31M cts. Alrosa 2019 revenue $3.3B (-26%), sales volume 33.4M cts. (-12%). Far East dealer market slow ahead of Lunar New Year. Luk Fook to shut some Hong Kong stores as spending shifts to China. Richemont 3Q jewelry sales +9% to $2.4B. GIA halts sealing service following tampering.

Fancies: Ovals are strongest shape, driven by US fashion jewelry demand. Emeralds above 2.50 ct., D-G, VVS2-VS2 also selling well. Pears slightly slower due to sluggish Hong Kong market. Princess and Marquise continue to struggle. Well-shaped and fine-cut fancies have become a profitable niche with good demand and strong prices, especially Ovals, Emeralds and Pears. Fancies with classic and long ratios trending in fashion segment. Shortage of top-make fancies 1.50 ct. and larger in all categories except D color. US sustaining market for commercial-quality, medium-priced fancies. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Dealers optimistic for 2020 after positive holiday season for high-end brands focused on design. National Retail Federation reports 4.1% rise in total November-December sales amid strong employment data and personal wealth. Slight lull in trade as retailers handle consumers’ January returns. Select categories showing shortages while concerns grow about oversupply of weaker items. Focus shifts to Valentine’s Day as jewelers start placing orders.

Belgium: Start of year better than expected due to steady US demand. Strong appetite for 0.30 to 0.60 ct., D-I, VS-SI2, certified goods. Fancy shapes moving well, but fancy colors slowing. Dealers nervous about Far East market amid continuing Hong Kong protests. Rough trade preparing for changes to De Beers sightholder system that will see it embrace more subjective methods for determining clients’ allocations of goods.

Israel: Market focused on post-holiday restocking. Peak 2019 selling season flat compared with 2018. Rising interest in round, 0.30 to 0.40 ct., D-F, IF-VS1, RapSpec A3+ diamonds. Steady orders for 0.70 to 1 ct. polished. Large high-end stones weak.

India: Polished slower than usual for this time of year. Dealers worried about repeat of 2019 diamond glut as they anticipate influx of rough following large De Beers and Alrosa January sales. Chinese New Year offering some optimism for suppliers. Local Indian jewelry market weak amid tight liquidity and high gold prices.

Hong Kong: Trading quiet as businesses close for Chinese New Year. Focus after the festival will be on March Hong Kong show, with expectations high amid solid retail demand from mainland. Local jewelry market still slow due to protests and weak tourism industry. Chow Tai Fook and Luk Fook planning to reduce their store networks in affected areas.
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