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Rapaport Weekly Market Comment

Feb 6, 2020 10:58 AM   By Rapaport News
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Hong Kong shows postponed to May 18-21 as coronavirus impacts global trade. Weak Chinese New Year sales to reduce 1Q inventory replacement as jewelers are left with large volumes that didn’t sell. Diamond markets quiet. Polished prices supported by shortages, particularly of 0.30 to 0.49 ct., D-F, IF-VVS2 goods. 1 ct. RAPI -0.4% in Jan. Manufacturers cautious, despite strong recent rough buying, as oversupply of lower-quality diamonds remains. Russia’s Eximbank enters diamond lending as Alrosa helps negotiate loan to Dali Diamond. Lucara finds 549 ct. rough at Karowe mine. Martin Rapaport to give keynote presentations at Israel Diamond Exchange Feb. 10 and Palm Beach Show Feb. 16.

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: Polished trading stable, but dealers lacking usual first-quarter buzz. Little inventory buying as retailers focus on memo and online sourcing. Pockets of good demand, with steady orders for 1 to 1.50 ct., G-J, VS2-I1 diamonds for bridal. Retailers focused on Valentine’s Day promotions. Consumer confidence rises in January, according to Conference Board index.

Belgium: Market relatively quiet after good January trading. Buyers cautious due to renewed uncertainty in China. US and European demand stable. Steady orders for 0.30 to 0.60 ct., F-I, VS2 goods. 1 ct., G-J, VS-SI doing OK. 2 to 4 ct. weak. Rough market slower after strong January sales.

Israel: Slow market, but improvement anticipated during International Diamond Week (Feb. 10-12). Dealers focused on US customers amid China slowdown. Steady demand for commercial-quality diamonds for US engagement rings. Firm prices for 0.30 to 0.49 ct. goods, despite decline in Chinese orders. Fancy shapes stable, with shortages of fine-cut, 1.50 to 10 ct. pears and ovals.

India: Cautious sentiment amid tight liquidity and concerns about oversupply. Manufacturers maintaining low production to avoid flooding the market with goods. Steady demand for 0.30 to 0.50 ct. diamonds. Few overseas buyers in Mumbai after India canceled visas for Chinese visitors. Trade disappointed by 2020 government budget, which kept import duty on gold at 12.5% and polished diamonds at 7.5%.

Hong Kong: Fewer buyers in the market as government imposes two-week quarantine on visitors from mainland China following outbreak of coronavirus. Dealers extending Lunar New Year break or working from home. Chinese jewelers facing sharp sales decline as some cities are on lockdown. Hong Kong luxury suffers toughest year in decade due to city protests, with 2019 jewelry, watches and clock sales -22% to HKD 66.2 billion ($8.52 billion). Virus quashes pre-lunar festival optimism.
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