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Rapaport Weekly Market Comment

Jul 9, 2020 11:18 AM   By Rapaport News
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Diamond trade uncertain amid spike in coronavirus infections and new restrictions in India and Israel. Prices firm for select goods as 1 ct. RAPI +1.9% in June. Investment demand for 0.50 to 1 ct., D, IF and bridal supporting the market. Rough trading significantly reduced as Surat factories close again for lockdown. Miners under pressure. Smaller producers willing to drop prices to generate sales and raise liquidity. Manufacturers seeing greater profit from rough bought at tenders than at De Beers or Alrosa contract sales. Global 2019 production -7% to $13.5B, volume -12% to 130M cts., average price +6% to $103/ct. Belgium June exports -44% to $469M, rough imports -48% to $351M.

Fancies: Fancy shape sales sluggish. Dealers hoping for improvement in fancy shape engagement rings as consumers seek alternative designs at lower cost. Reduced inventory of 1.50 ct. Ovals and Pears supporting prices, but demand still weak. Cushions showing similar price declines to rounds. High availability of fancies below 1 ct. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Improving demand for select categories as wholesalers and retailers adapt to Covid-19 reality. Bridal, branded pieces and vintage estate jewelry generating steady sales. Collectors looking for authentic old miners and old European cuts, which are difficult to find. Strong interest in investment-grade products such as high art, statement luxury, and jewelry over $1 million. Dealers maintaining higher prices for memo goods.

Belgium: Market quiet amid slow dealer trading. Focus on filling orders from jeweIers in US and China. Emphasis on bridal goods with 0.50 to 1.10 ct., D-H, VS-SI center stones. Some demand for diamonds above 5 ct. Industry cautious about current conditions but optimistic for fourth quarter. Rough trading down despite significant drop in prices at tenders.

Israel: Diamantaires concerned about second wave of coronavirus infections. Israel Diamond Exchange president Yoram Dvash appealing for government support after exports dropped 80% and local trading fell 90% between March and May. Delay in international shipments causing dealers to source domestically rather than from India. Buyers paying more in Israeli market due to limited selection. Uptrend in 0.50 to 0.70 ct., D, IF, RapSpec A3+ (3X, none) goods.

India: Sentiment weak as Covid-19 cases continue to rise. Surat on lockdown again, with offices closed until July 10 and factories shut until July 14. Liquidity tight amid reports some foreign buyers delaying payment. Industry calling on government to reduce polished import duty from 7.5% to 2.5%, entice banks to raise credit, and waive income tax on rough sales for miners in India.

Hong Kong: Many fear resurgence of virus will delay reopening of China border and slow recovery in dealer market. Suppliers raising inventory levels to meet rising demand in China. Luxury retailers struggling due to drop in tourist shoppers and slump in local buying. More stores closing and businesses shifting to e-commerce. September Hong Kong show postponed to November 9 to 13.
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