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Rapaport Weekly Market Comment

Jun 11, 2020 11:02 AM   By Rapaport News
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Market activity slow, but sentiment improving as retail reopens and US unemployment reduced to 13.3% for May. Growing interest in investment diamonds, with higher prices for D-IF, 0.50 ct. and 1 ct. (3X, none) goods. Tiffany & Co. signals robust recovery in China after 1Q revenue -45% to $556M with loss of $65M vs. profit of $125M, e-commerce sales +23%. Signet Jewelers 1Q revenue -41% to $852M, loss of $190M vs. loss of $10M, online sales +7% to $165M. Rough sector quiet ahead of next week’s De Beers sight. Alrosa May sales -86% to $36M. Rapaport Price List returns to weekly publication. Next price list Friday, June 19. See announcement here.

Fancies: Fancy shapes sluggish as US retailers reopen with enough inventory in stores. Weakness across all categories, including top makes and large sizes. Downtrend affecting all products and stemming from external forces beyond industry’s control. 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: Trading quiet. Situation improving as New York DDC opens, but dealer and retail markets mostly closed in the city due to ongoing Covid-19 lockdown and George Floyd protests. Retail slowly reopening in rest of the country. Jewelers focused on enhancing e-commerce platforms as pandemic accelerates digitization trend. Expectations for some pent-up demand in bridal category.

Belgium: Most Antwerp offices open with reduced staff. Better demand from Hong Kong and US, but orders are limited to specific items that fill immediate needs, as retailers have enough inventory. Rough-market sentiment weak. Dealers cautious about offering credit in fragile economy. HRD closes equipment division to focus on grading and education.

Israel: Chinese retail recovery and reduced rough supply supporting the polished market. Polished orders selective, with jewelers seeking replacements for diamonds sold rather than buying for inventory. Dealer trading remains very quiet. Increase in demand for round, 0.50 to 2 ct., D, IF goods. Bank Leumi and credit provider Peninsula make independent offers to buy Union Bank of Israel’s diamond portfolio.

India: Trading offices and manufacturing facilities partially operational. Exports focused on Hong Kong and sporadic US orders. Stars and melee, piqué goods doing better. Stable market for 1 ct., D-E, IF-VVS1. Polished production low. Manufacturers limiting rough purchases with 30-day voluntary moratorium on rough imports.

Hong Kong: Demand from China driving activity. Larger dealers gaining market share. Smaller companies trying to reduce prices to entice buyers and generate cash flow. Improving interest in 0.30 ct., 1 ct. and 1.50 ct., D-H, VVS-SI1 goods. Inventory levels rising as more shipments arrive from India. Gemstones like emeralds and rubies doing well, and consumers seeing investment value in gold jewelry.
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