Rapaport Weekly Market Comment

Diamond market optimistic for 2018 after good holiday
season. Polished prices supported by shortages of select goods as manufacturing
stays below capacity. 1 ct. RAPI -5.3% in 2017, with +0.3% increase in Dec. as
difficult year ends on a positive note. Strong rough demand expected when
Alrosa and De Beers resume sales later this month. Positive outlook for Chinese
New Year (Feb. 16), with high-end consumer confidence boosted by recent
stock-market rally. Hong Kong improving with Nov. jewelry, watch and luxury
sales +8% to $783M. Titan Company
reports double-digit Diwali jewelry-sales growth. EU takes over as Kimberley
Process chair.



Fancies: Fancy shapes mixed, with curves better than squares. Ovals hot,
followed by Pears and Cushions as next-best shapes. Emeralds and Radiants okay,
but Princesses still weak. Oversizes selling well. Steady demand for
fine-quality 6 to 10 ct. Ovals, Pears and Emeralds, with limited supply. US
demand supporting market for commercial-quality, medium-priced fancies under 1
ct. Far East demand improving as consumers seek fancy shapes at better prices.
Off-make, poorly cut fancies illiquid and hard to sell, even at very deep
discounts.

United States: 47th Street quiet. Businesses slowly returning from Christmas-New
Year holiday, but snowstorm keeping buyers at home. Initial holiday retail
reports positive. Dealers optimistic as they wait for holiday memo returns. Trading
expected to increase in January as inventory levels declined during holiday
season. Consumer confidence high as stock-market rally continues.

Belgium: Diamond trading slow with bourses closed until January 8. Dealers
assessing first-quarter inventory needs. European holiday season mixed. UK
jewelers report positive Christmas, but France and Italy sluggish. Rough trade
quiet.

Israel: Positive sentiment as dealers report good US holiday sales. Focus now
shifting to Far East for Chinese New Year. Suppliers maintaining firm prices
when filling select orders. Polished inventory reduced in line with last year’s
levels.

India: Stable market driven
by Chinese New Year orders. US and Europe quiet during holiday break. Some
Antwerp dealers in Mumbai looking for goods. Dealers note positive trend from
consumers in India, US and China. Rough trading quiet, with prices on secondary
market firming. Manufacturing stable, with new polished slowly coming to the
market.

Hong Kong: Polished trading slower but sentiment positive. Dealers optimistic
for coming Chinese New Year season with renewed retail growth in Hong Kong and
China. Steady demand for 0.30 to 0.60 ct., H-L, VS1-SI2 diamonds. Good demand
for 1 ct., F-J, VS-SI, RapSpec A2+ diamonds. Buyers working with tighter
budgets are shifting to lower color and clarity.