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Rapaport Weekly Market Comment

Mar 10, 2022 10:00 AM   By Rapaport News
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Note: The following market comments were written prior to the US government order banning the import of Russian-origin diamonds into the country. Rapaport will issue a statement and trade alert on the issue shortly.

Russian sanctions unlikely to reduce rough supplies since Indian firms are seeking alternative payment methods and can legally sell resulting polished to America. Sanctions are on payment methods and not on diamonds. Surging commodity prices and inflation are rocking markets. Gold breaks $2,000/ounce. Polished prices stabilizing as consumers battle higher gas and food costs. Rough market cooling as March auction prices decline amid uncertainty. Alrosa reducing its profile and has resigned from boards of Responsible Jewelry Council, Natural Diamond Council and Diamonds Do Good. De Beers Feb. sales +18% to $650M. Douglas Hucker steps down as CEO of American Gem Trade Association. 

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: Sentiment mixed. Buyers looking to fill specific orders and making a lot of memo deals. Very few inventory purchases as caution over prices continues. Optimism among upscale jewelers is stimulating appetite for better-quality diamonds. Luxury brands gradually shifting toward US-manufactured polished, but not enough workers available to meet new demand.

Belgium: Ukraine crisis has dampened mood. Dealers focusing on US but seeing fewer orders than in January and February. Steady interest in European high-end jewelry. Suppliers holding polished prices firm due to steep rough costs. Rough trading stable. Secondary market seeing reduced premiums.

Israel: Caution rising due to Russian war. Dealers concerned prices don’t reflect geopolitical and economic risks. Major suppliers have good liquidity despite resistance from buyers and are maintaining discount levels. Fancy shapes doing well and offering better value than rounds. Marquises hot.

India: Market slowing amid global uncertainty. Local currency weakens to INR 76/$1. Buyers only making purchases when there is specific demand and when price is right. Many concerned about Alrosa supply. Polished production below capacity due to high rough costs. Sales of rounds decreasing. Fancy shapes moving well.

Hong Kong: Local Covid-19 outbreak denting activity. Retail traffic down as consumers stay at home. January sales of jewelry, watches, clocks and valuable gifts in Hong Kong up 7% year on year, but growth slower than in previous months. Chinese orders drop during low season. Stores looking to keep inventories small.
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