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Rapaport Weekly Market Comment

Apr 30, 2020 11:02 AM   By Rapaport News
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Diamond trading limited as some centers start to ease lockdown restrictions. Dealers and manufacturers focusing on how to reduce inventory, with more than enough rough and polished in the pipeline to satisfy demand. Outlook uncertain as US economy shrinks 4.8% in 1Q. Miners cut 2020 production plans and India prepares voluntary 30-day pause in rough imports. Marketers to focus on bridal as pandemic highlights important relationships. De Beers expects tighter consumer budgets will signal shift to fewer, better-quality diamond purchases. Rapaport Flash Sale Jewelry Auction – May 5-6 (Tue.-Wed.). New TradeSheet featuring Rapaport Discount Prices launched today.

Fancies: Fancy shapes sluggish amid lockdown of US retail. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Dealer market quiet as New York remains in lockdown. US consumer sentiment plunges amid high unemployment, with Conference Board Consumer Confidence Index down 27% to 86.9 in April, its lowest reading in nearly six years. Some states mull reopening economy, but non-essential retail still shut. Mall-based jewelers most vulnerable to prolonged slowdown.

Belgium: Government okays business activity to restart on May 4. Very little appetite for rough. Dealers anticipate limited new rough supply in next two months. Belgium 1Q polished exports -45% to $1.7B, rough imports +2% to $2.1B.

Israel: Some dealers return to offices as government eases restrictions. Bourse trading floor remains closed. Full lockdown reinstated for Independence Day celebrations. Rapaport single-stone auction in Ramat Gan demonstrates desire to generate liquidity with sales of $637,000.

India: Mumbai trading and Surat manufacturing remain on lockdown. Deep liquidity concerns. National banks expected to curb lending as they reportedly write off INR 68.6 billion ($9.2 billion) in bad loans countrywide. Manufacturers set to avoid rough purchases to focus on depleting large polished inventories. Cutters have enough rough to resume factory operations, but plan very gradual restart due to required social-distancing measures and low demand.

Hong Kong: Gradual reopening of the economy in both mainland China and Hong Kong. Very little traffic between the two as quarantine measures for arrivals remain in place. Some pent-up demand for luxury products, but overall consumer spending cautious. Dealer market starting to take orders again with limitation on deliveries from overseas.
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