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Rapaport Weekly Market Comment

Feb 13, 2020 10:58 AM   By Rapaport News
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Dealers and manufacturers cautious, with deep concerns about impact coronavirus will have on the market. Slump in Chinese demand as retail shuts down during peak season, leaving jewelers with high inventory. Chow Tai Fook suspends 40 Hong Kong-Macau stores and 80% of China locations. Liquidity tight as Far East customers delay payments. India’s GJEPC appeals to banks and government for more time on loan repayments. Rough market slowing after strong Jan. sales. Inventory of 0.30 to 0.50 ct. polished rising again. Alrosa CEO Sergey Ivanov pledges to sell 22M ct. rough inventory in responsible manner. US 2019 polished imports -16% to $19.5B. Shane Durgin steps down as Dominion CEO.

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: Mixed feedback from retailers about Valentine’s Day sales, with online and QVC-type TV platforms doing well. Jewelers offering promotions during Valentine’s Day-Presidents’ Day long weekend. Indian and Israeli dealers shift focus to New York after Hong Kong and China shutdown, creating concern about pending oversupply on 47th Street. Shortage of RapSpec A3+ (3X, none) goods.

Belgium: Sentiment weak and trading levels down amid China concerns. High-end and large stones soft as European luxury houses suspend China operations until virus contained. Top-quality small stones also sluggish amid slowdown in Swiss watch sales. Fancy shapes selling, with improvement in marquise and pear shapes. Rough market uncertain as Indian manufacturers scale down buying.

Israel: Good networking and positive vibe during International Diamond Week. Steady trading among local dealers and some Indian buyers. Focus on niche segments such as large fancy shapes and fancy colors. Concerns about payment from Far East customers. Large-stone rough demand stable at auctions.

India: Sluggish market in absence of China and Hong Kong-based buyers. Demand down but suppliers maintaining steady prices for now. Manufacturers concerned polished prices will soften as coronavirus’s impact on business spreads. Inventory levels rising again due to China slowdown and strong rough buying in Dec.-Jan. Purchase of commercial-quality rough cautious at start of Alrosa Alliance sale.

Hong Kong: Short-term outlook pessimistic as coronavirus crisis continues. Many businesses closed or working fewer hours and with minimal staff. Very little polished trading in absence of Chinese demand and international buyers. Some orders from other Asian markets. Retailers under pressure as sales plummet but labor and rental costs remain.
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