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Rapaport Weekly Market Comment

Jul 28, 2022 10:40 AM   By Rapaport News
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News: Trading centers quiet with Belgium shutting for August summer break. Polished prices declining as demand drops and inventory rises. US dealers resilient despite economic caution. Consumer confidence down in July amid inflation concerns and higher interest rates, Conference Board says. Fed raises rates 0.75%. Rough premiums cool after strong 1H. Cutters maintain low polished production. De Beers 1H revenue +24% to $3.6B, earnings +84% to $491M, July sight valued at $630M. Rio Tinto 1H diamond revenue +191% to $465M, earnings up 18-fold to $91M. Tiffany & Co. boosts LVMH 1H jewelry and watch revenue +22% to $5B, profit +26% to $1B. GIA launches source verification service.

Fancies: Market stable. Supply shortages of well-cut fancies supporting prices. 1.20 to 3.99 ct., F-J, VS-SI is hottest category. Oval is leading shape, followed by Radiant, Emerald, Pear, Cushion and Marquise. Retailers offering broader product ranges as consumers seek alternative cuts. Growing interest in fancy-shape engagement rings. Oversizes trading at higher prices than usual. Excellent shapes commanding premiums. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Trading seasonally slow. Slight uptick in activity as businesses have reopened following early July summer break. Steady memo calls. Contract manufacturers busy filling orders from top brands. Larger jewelry chains expected to make holiday inventory orders in coming weeks. High-end retail strong as affluent consumers continue to spend.

Belgium: Market quiet ahead of August vacation. Bourses and many offices to close from next week (August 1 to 21). Diamantaires optimistic for holiday season but expect slow third quarter. Dealers looking for inventory, anticipating polished shortages due to lack of Alrosa rough. European luxury houses seeing strong momentum with stellar first-half jewelry sales.

Israel: Sentiment weak with expectations for sluggish third quarter. Polished inventory rising but dealers struggling to find right certified goods to fill buyer requirements. US demand driving the market. Tight profit margins on available stock. Fancy shapes slightly slower but better than rounds, with steady interest in ovals and elongated radiants.

India: Market uncertainty fueled by global slowdown and currency fluctuation. Some overseas buyers in Mumbai looking for bargains from companies that need to boost cash flow. Suppliers to local market hoping for strong IIJS show next week (August 4 to 8). Melee in VS-SI is stable; other small-stone categories slow. Local industry faces 15% to 20% revenue decline this fiscal year, Crisil Ratings predicts. Polished production low amid decline in demand and lower rough availability.

Hong Kong: Trading seasonally quiet during summer vacation. Dealers reluctant to purchase in downward market. Engagement ring sales supporting the market, but retail sentiment is down. Cross-border restrictions limiting activity, with quarantine measures still in place on arrival. Spending sluggish in mainland China amid economic slowdown. 
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