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Rapaport Weekly Market Comment

Aug 11, 2022 10:00 AM   By Rapaport News
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News: Diamond market cautious amid China slowdown and US economic uncertainty. Polished prices declining. Inventory remains high. IIJS show reflects upbeat Indian jewelry market and spurs optimism for Diwali. Cutters maintaining lower production and anticipate strong demand for De Beers rough at next week’s sight. Speculation that large manufacturers able to purchase Alrosa rough through non-dollar payment channels. Signet Jewelers inks deal to buy Blue Nile for $360M, lowers FY revenue guidance by 5% to $7.6B vs. $7.8B last year. Titan 1Q sales +169% to $1.2B, profit of $99M vs. $2.3M last year. Sarine 1H revenue -13% to $13M, profit -48% to $6.5M, reflecting drop in rough sales and manufacturing.

Fancies: Market has cooled for 0.30 to 1.20 ct. diamonds. Supply shortages of well-cut fancies supporting prices. 1.20 to 3.99 ct., F-J, VS-SI goods stable. 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 stable amid high-end growth. Mid-market weakening due to impact of inflation on budgets. Demand for 3 ct. and larger diamonds strong; 1 ct. stones softer. Drop in polished prices has given buyers upper hand and pressed Indian manufacturers to offer more attractive terms. Melee slow. Jewelers assessing consequences of Signet-Blue Nile deal.

Belgium: Market quiet during summer shutdown. Bourses closed for another week. Rough trade slow ahead of next week’s De Beers sight (August 15 to 19). Polished dealers uncertain due to decline in orders from US and China.

Israel: Bourse officially on vacation from August 8 to 21. Activity limited; many dealers absent. Market sluggish amid global slowdown. Traders hoping for improvement ahead of fourth-quarter holidays.

India: Domestic market upbeat. Mumbai IIJS fair signals robust jewelry demand as Diwali festival and wedding season approach. Gold driving local sales. Diamonds also popular due to cultural changes and Western style influences. Titan reports strong growth as consumers shift to brands such as Tanishq. Manufacturers concerned about China slowdown but expect steady US holiday sales despite current slump. Lower rough supply reducing polished production. Large manufacturers keeping workers busy with lab-grown rough.

Hong Kong: Sentiment picking up as government shortens quarantine period for arrivals. Dealers optimistic that increase in tourism will boost sales in coming months. Consumers receiving latest batch of stimulus vouchers, but impact on luxury spending expected to be small. Mainland orders improving; solid interest in 0.30 to 0.80 ct. and 1 to 2 ct., F-H, VS-SI1, 3X diamonds. Engagement-ring segment slow.
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