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Rapaport Weekly Market Comment

Apr 22, 2021 12:00 PM   By Rapaport News
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TRADE ALERT: India is undergoing a severe Covid-19 crisis that will impact the global diamond trade. India manufactures about 92% of the world’s diamonds. While the Indian government is doing everything possible to support continued diamond manufacturing and exports, shortages and price volatility are expected to intensify over the next few months. This is a good time to support Indian suppliers. The disruption to the supply chain will be significant once current goods being processed by the GIA are put on the market. We anticipate a 30% to 40% reduction in Indian production during the months prior to the holiday season. Our hearts and prayers go out to the Indian diamond community. May they stay safe and recover swiftly.

Market uncertain due to rise in India Covid-19 cases. US and China jewelry sales up, with optimism for Mother’s Day. Supply concerns as GIA India reports backlog of over a month. Polished prices firm. Dealers with strong online channels and good reputations getting better prices. Rough market expected to cool; major miners likely to keep supply low and prices stable. De Beers 1Q sales volume +52% to 13.5M cts., production -7% to 7.2M cts. Alrosa 1Q sales +28% to $1.2B, prices +7%. Sotheby’s NY totals $21M (93% by lot), with 41.50 ct., D, FL diamond ring selling for $4.9M ($117,108/ct.).

Fancies: Market for fancies seeing upturn. Some higher prices as consumers seek alternative shapes at more affordable prices than rounds. Dealers witnessing increased sales of fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds and Radiants above 2 ct. Cushion, Princess and Marquise improving. Buyers showing preference for elongated shapes with the right proportions. Excellent cuts in demand and selling at premiums. Steady orders in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: New York market stronger than other global centers. Dealers doing well, with steady stream of memo calls. Sold items difficult to replace amid supply shortages due to GIA backlog in India. Stable demand for 1 ct., G-J, VS-I1 diamonds. Jewelers optimistic for Mother’s Day sales as retail opens up after vaccination drive.

Belgium: Dealer trading quiet. Focus on exports to the US. Good demand for 1 ct., E-G, SI goods. Europe remains slow due to pandemic. Buyers cautious about sourcing from India as tightening of Mumbai’s Covid-19 restrictions sparks payment concerns. Rough market subdued during this week’s Alrosa sale.

Israel: Bourse back to full activity. Trading limited due to lower availability from India. Dealers looking for goods and relying on online platforms for sourcing needs even as travel resumes. Suppliers making trips to renew personal contact with US clients after year of web-based consultations. Steady orders for 1 to 1.50 ct., D-J, VS-SI diamonds.

India: Concerns increasing as Covid-19 cases escalate. Mumbai enters stricter lockdown. Diamond and jewelry industry allowed to operate. Polished production continues at lower levels since Surat remains open. Solid US and Far East demand for certified goods. Local retail market likely to weaken as stores close in major cities.

Hong Kong: Wholesale trade stable amid expectations of Indian production shortages. Local inventories low. Good orders for 0.30 to 1 ct., D-G, VS-SI, 3X diamonds. Retail sentiment improving as drop in coronavirus cases raises hopes of China border reopening. Mainland jewelry manufacturers increasing operations, with emphasis on colored gemstones.
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