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Rapaport Weekly Market Comment

Sep 3, 2020 11:31 AM   By Rapaport News
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Positive sentiment as the trade adapts to the Covid-19 selling environment. Polished prices firming due to shortages. 1 ct. RAPI +3.2% in Aug. Manufacturers seeing better profit margins after De Beers and Alrosa reduced rough prices. Polished production increasing but coronavirus restrictions still limiting Surat factories. Rough trading steady. Momentum likely to continue through October as retailers prepare holiday inventory. Signet Jewelers 2Q sales -35% to $888M, loss of $82M. Macy’s highlights strong jewelry category. Belgium July polished exports -35% to $580M, rough imports -30% to $376M. RapSpec A3 Diamond Specs changed to exclude faint fluorescence.

Fancies: Reduced inventory supporting prices for select fancy shapes. Ovals and Pears strong in 1.50 to 2 ct., G-K, VS-SI categories and 3 to 5 ct. SIs. Very fine fancy cuts selling at a premium. Rising orders in China helping the market. 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: Bridal supporting the retail segment as jewelers start to plan inventory for holiday season. Supply shortages leaving dealers struggling to replace better-quality goods they have sold. Solid demand for 1 to 3 ct., G-I, VS-SI, RapSpec A3 diamonds for engagement rings. Scarcity of rounds and ovals stimulating interest in emeralds and princess cuts. Strong market for 5 ct., D, IF diamonds among high-end jewelers.

Belgium: Dealers back from vacation with more optimistic view of market than one month ago. Focus is on European customers starting to prepare for the holiday season. Polished shortages stimulating rough trading as manufacturers gradually raise production levels. De Beers and Alrosa goods selling at a premium on the secondary market. GIA considers shutting Antwerp lab.

Israel: Trading restrained due to lack of supply as dealers try to fill orders. Prices firm, including for less popular goods such as those with medium blue fluorescence. Current polished production not enough to fill scarcities. Stable interest in 1 to 2 ct., D-H, IF-VS2 diamonds.

India: Steady demand from US and China fueling positive sentiment. Momentum expected to continue until Diwali (November 14). Local jewelers not buying, as retailers still only partially open. Certified goods moving better than non-certs. Surat market back open but manufacturing at 30% to 60% capacity. Rough trading busy and showing better profitability following De Beers’ August price corrections.

Hong Kong: Market confidence rising as government continues to ease Covid-19 rules. Demand from China driving activity, but limitations on delivery and foreign currency payments are making cross-border trade difficult for dealers. Luxury retail remains slow due to slump in tourist arrivals. Chow Sang Sang sales down 33% to $828 million in first half, profit down 66% to $27 million. Increase in orders for fancy shapes and fancy-color diamonds. This year’s September show has been canceled after initially being postponed to November.  
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