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Rapaport Weekly Market Comment

Jul 15, 2021 10:30 AM   By Rapaport News
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CAUTION: Rough prices surging out of control with some secondary market premiums over 10%. No assurance that polished prices will follow rough price increases. Manufacturing profit margins under pressure as De Beers raises prices 5% at July sight. Rough prices have increased an estimated 20% in 2021 with 1-carat polished only up 11%. Polished trading steady. US and Chinese demand supporting the market. Inventory rising for goods below 1 ct., but shortages remain for select items. De Beers and Diacore buy 39.34 ct. blue rough from Petra Diamonds for $40M ($1M/ct.). Private bidder pays $12.3M ($121,326/ct.) in cryptocurrency for pear, 101.38 ct., D, FL diamond at Sotheby’s.

Fancies: Market robust. Prices firming across most sizes and categories amid shortages and growing fancy demand. Retailers offering wider product ranges as consumers seek alternative shapes. Dealers seeing increased sales of fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds, Princesses, long Radiants and Marquises. Ovals and Cushions closing price gap with Rounds. Oversizes trading at higher prices than usual. Excellent cuts popular and commanding premiums. Steady orders in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Active trading despite two-week summer vacation period. Larger wholesalers and dealers filling orders and seeing strong sell-through rate on memo. Some smaller companies struggling to compete. Good demand for round, 1 to 2 ct., G-J, VS-SI diamonds. 2 to 3 ct. ovals and emeralds hot. Retail jewelers upbeat amid surge in gift-giving occasions after last year’s cancellations.

Belgium: Positive sentiment and steady movement of 1 to 2 ct., D-H, VS-SI2 goods. 3 ct. slightly weak. Dealers looking for international exposure at trade shows again after past year’s focus on local market and online trading. Fancies selling well; steady demand from European jewelers. More goods becoming available as rough market maintains strength from beginning of the year.

Israel: Polished activity seasonally slow. Many US buyers on vacation. Prices firm amid supply shortages, solid demand and high rough costs. Fancy shapes increasing in price, particularly in H-I colors. Robust market for ovals and pears. Princess cuts making a comeback. Polished exports rose 69% to $1.71 billion in first half; rough imports grew 165% to $1 billion.

India: Market maintaining upward trend amid strong US and Chinese demand. Steady movement in rounds and fancies 1.50 ct. and larger. Lower clarities (I1 and below) are popular. Ovals and pears selling well. Rising concerns that price bubble could lead to hard landing. Some companies reportedly in financial difficulty. Rough expensive as manufacturers seek goods to fill inventory gaps. Surat production at estimated 80%.

Hong Kong: Wholesale seeing seasonal lull. Chinese investment demand focused on gold rather than diamonds. Solid interest in 1 to 1.50 ct., D-M, SI diamonds, especially in lower colors (J-M). Very little movement in 3 ct. and larger. Hong Kong retail improving as government gets virus under control. Continued hopes that border with mainland will reopen and enable buyers to visit. 
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