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Rapaport Weekly Market Comment

Sep 19, 2019 10:58 AM   By Rapaport News
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Hong Kong show brings fewer visitors, but better-than-expected trading. Serious buyers attending. Fair reflects specific Chinese interest and shift to lower-color diamonds. Pockets of good demand, with shortages of nice (eye-clean) RapSpec A3+ SIs due to reduced manufacturing. Some small-scale Indian cutters closing early for Diwali. De Beers maintaining flexibility for next week’s sight, allowing 20% buybacks or 50% rejections. Petra Diamonds FY revenue -6% to $464M, loss of $258M vs. $203M loss in previous year. Focus shifting back to US ahead of 4Q season, with call for major marketing campaign to raise consumer demand. US specialist jewelers’ 1H sales -5% to $14.4B.

Fancies: Fancy shapes soft, reflecting slowdown in overall demand. 3 to 8 ct., I-K, VS-SI1 moving better than rounds as dealers and consumers shift to lower price points. Well-known brands are paying highest prices, as are buyers with specific requests. Ovals for fashion jewelry moving well, especially 1.50 and 2 ct., G-H, VS and H-K, SI2. Marquises and Princesses weak despite reduced manufacturing. US sustaining market for commercial-quality, medium-priced fancies under 1 ct. Chinese consumers seeking fancy shapes at better prices. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: Dealers looking for buying opportunities, but remain selective and price-sensitive. Retailers have yet to make significant orders for the holiday season and are concentrating on memo goods for now. Steady retail demand for 1 ct., G-J, VS2-I1 goods. Large stones above 3 ct. weak.

Belgium: Quiet trading, with dealers focused on the Hong Kong show. Buyers looking for deals, as they perceive suppliers are under pressure to raise liquidity. Stable market for 0.30 to 1 ct., G-H SIs. Emphasis on 3X, nonfluorescent goods (RapSpec A3+). Rough market slightly more optimistic ahead of next week’s De Beers sight than it was a month ago.

Israel: Slow activity in the bourse, since many are in Hong Kong and because it was a short week due to national elections. Shortages developing and prices firming for 0.50 to 1 ct., F-I, VS2-SI2 (3X, nonfluorescent) diamonds. Lesser qualities difficult to move. Shift to lower price points as jewelers compensate for higher gold price.

India: Fewer goods and buyers in the local market during the Hong Kong show. Dealers looking to fill specific orders, with very little inventory-buying. Volatile melee market seeing slight improvement in lower price ranges. Polished production still at reduced levels, with some small-scale manufacturers closing early for Diwali. Larger exporters preparing inventory as they anticipate US holiday orders.

Hong Kong: Trade focused on the show, which ends Sunday (September 22). Visitor traffic down from previous years due to demonstrations in the city. Subdued activity affecting smaller exhibitors more than large suppliers. Steady Chinese demand for 1 ct., F-K, VS-SI (RapSpec A3+) goods, with move toward lower colors. Muted expectations for retail sales during upcoming National Day (October 1), given the ongoing protests.
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