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Rapaport Weekly Market Comment

Feb 3, 2022 10:00 AM   By Rapaport News
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Diamond dealers busy but uncertain about market direction. Suppliers maintaining prices and expecting uptrend to continue; buyers concerned about replacement costs and tight profit margins. 1 ct. RAPI +6.9% in Jan. Price gains stimulated by expensive rough, scarcities and US demand. China quiet. Rough in short supply despite below-capacity manufacturing. De Beers Jan. sales of $660M consistent with last year but reflect lower volumes at higher prices. Miners pushing for more efficient supply chain; Alrosa reduces time between processing and sales by 15 to 25 days. LVMH 2021 jewelry and watch revenue +167% to $10.11B. India cuts polished diamond import duty from 7.5% to 5%.

Fancies: Market robust. Good demand across all sizes. 1.20 to 3.99 ct., F-J, VS-SI is hottest category and seeing scarcities. 0.30 to 0.99 ct. improving in VS and better clarities. Fancies below 0.30 ct. showing significant gains since Diwali. Supply shortages supporting prices. Retailers offering broader product ranges as consumers seek alternative shapes. Growing interest in fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds, Princesses, long Radiants and Marquises. Oversizes trading at higher prices than usual. Excellent shapes commanding premiums. Steady demand in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Slower trading than previous weeks. Buyers concerned about rising prices. Dealers struggling to make profit when replacing sold goods. Steady demand for 1 to 2 ct., D-F, IF-VVS, but transactions very price-sensitive. Jewelry retail upbeat as sales momentum continues, fueling strong expectations for Valentine’s Day. Positive sentiment at Centurion show.

Belgium: Trade optimistic, particularly rough dealers. Some concern that rough and polished price growth is fueling speculation. Difficult to buy. Suppliers with inventory in strong position. Steady demand for 1 to 1.50 ct., D-J, VS-SI, 3X goods. European luxury retail doing well.

Israel: Light activity in the bourse due to high Covid-19 infection rates. Dealers looking for goods but struggling to purchase at current price levels. Suppliers focused on US market and online trading. Growing concerns that stock-market volatility may influence diamond-industry sentiment.

India: Stable market supported by US orders. Stars, melee and parcel goods in demand despite recent price increases. Steady movement of certified goods. Suppliers raising asking prices due to higher rough costs; buyers growing cautious. Manufacturers operating at estimated 75% of capacity, with rough shortages hurting smaller operations.

Hong Kong: Wholesale and retail quiet over Chinese New Year period. Covid-19 restrictions also limiting activity. Luxury segment hurt by lack of tourist shoppers: Visitors to Hong Kong fell 97% to just 91,398 in 2021. Retail sales of jewelry, watches, clocks and other valuable gifts jumped 27% to $4.98 billion for the year. China also slow during the holiday season.  
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