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Rapaport Weekly Market Comment

Jul 23, 2020 11:18 AM   By Rapaport News
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Market uncertainty continues as global coronavirus cases surpass 15M. Rise in Covid-19 infections disrupting efforts to reopen businesses in major diamond trading and cutting centers. Many Surat manufacturing units shut until end of July. US-China tensions fueling caution. Low expectations for next week’s De Beers and Alrosa sales. Miners holding substantial rough inventory. Petra FY revenue -36% to $296M, production -23% to 2.9M cts. Rio Tinto 2Q diamond production -7% to 7.7M cts. JBT sees rise in credit downgrades as more jewelers miss payments to suppliers. J.C. Penney 1Q jewelry sales -46% to $75M. De Beers invests in online retailer Gemist.

Fancies: Reduced inventory supporting prices for select fancy shapes. Ovals in 1.50 to 3 ct. are the strongest category, followed by Pears. Excellent cuts and nice shapes in demand. Dealers hoping for improved sales of fancy shape engagement rings as consumers seek alternative designs at lower cost. High availability of fancies below 1 ct. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Rising concerns about further shutdowns due to Covid-19 surge in southern states. Larger retailers laying off employees as downturn continues and business moves online. Independents with self-owned stores performing better than mall-based chains with unpaid rental bills. Bridal category supporting the market. Steady demand for round and oval, 1 to 2.75 ct., G-H, VS-SI diamonds.

Belgium: Short working week due to Belgian National Day. Sentiment cautious amid uncertain US demand. Traders focusing on European clients because shipments are easier. Steady interest in 0.30 to 0.90 ct., D-F, IF-VVS1 diamonds. Some orders for 1 ct. Businesses planning summer vacation since market has slowed. No appetite for rough ahead of next week’s De Beers and Alrosa sales.

Israel: Diamond exchange quiet. Members expecting low traffic in coming months as pandemic situation worsens. Polished trading floor temporarily closed. Good demand for 0.50 to 0.70 ct., D, IF diamonds. Government including diamond industry in Covid-19 stimulus package after excluding it from previous ones.

India: Market slowing due to rise in coronavirus cases and shipping delays to US and Hong Kong. Surat manufacturing sector partly shut until end of July. Large gap between asking prices and offers. Clients not buying for inventory. Gold jewelry sales down as prices reach all-time high.

Hong Kong: Outlook weakens as government tightens Covid-19 rules amid third virus wave. Steady Chinese demand for 0.30 to 1 ct. D-K, VVS-SI goods. Mainland dealers keeping inventory low as US-China tensions rise. Luxury retailers seeing stronger results in China than Hong Kong as mainland consumers shop locally and avoid travel.
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