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Rapaport Weekly Market Comment

Jun 30, 2022 10:00 AM   By Rapaport News
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News: Trading slowed following Vegas highs as US dealers head for vacation. Industry expects 3Q lull but remains optimistic for holiday season. Recession fears grow after US GDP shrinks 1.6% in 1Q. Polished prices declining amid weak economic outlook and rise in inventory. Russian rough shortages likely to impact polished supply in 2H. Traceable non-Russian diamonds expected to sell at ethical premium. Natural Diamond Council faces $31M shortfall in marketing budget following Alrosa withdrawal. Luk Fook sees Apr.-May China slowdown after FY sales +33% to $1.5B, profit +37% to $177M. De Beers, Botswana extend current sales deal to June 2023. David Gotlib elected Belgium AWDC president.

Fancies: Market stable. Supply shortages of well-cut fancies supporting prices. 1.20 to 3.99 ct., F-J, VS-SI is hottest category. 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: Dealers optimistic for second half although market has slowed since busy Vegas shows. Lots of memo calls, which is typical before the summer break. 1 to 3 ct., G-I, VS2-SI2 the strongest category. Bridal expected to sustain the trade in the slower summer months. High-end strong as luxury houses make orders with New York suppliers.

Belgium: Mixed mood in Antwerp, with trading driven by strong US market. Greater caution from Europe and China. Melee doing well, with shortage of well-made piqué small stones. Good demand for fine-cut fancies, with ovals and pears the strongest shapes. Rough trading stable. Botswana President Masisi visits Antwerp, pitches permanent Kimberley Process secretariat in Gaborone.

Israel: Quiet market after successful Vegas shows. US demand slower than previous weeks. Hong Kong and China sluggish. Dealers buying to fill specific orders. Caution resulting from uncertainty over Russian rough supply, US July summer vacations and growth of lab-grown market.

India: Sentiment varied, with some categories stable and others softening. Good demand for 0.50 ct. and larger certified diamonds. Weaker market for 0.30 to 0.40 ct. stones. Some fancy shapes seeing slowdown. Polished production below capacity amid reduction in Alrosa rough supply. Limited quantities of Russian rough rumored to be available. Depreciation of Indian rupee to record low of INR 79/$1 raising concerns.

Hong Kong: Trading slow amid weak economy. Bridal supporting market as fashion jewelry spending remains sluggish. Steady interest in 0.30 to 0.80 ct., D-I, VS2-SI2, 3X diamonds. Larger stones seeing less movement. Retailers reducing costs by holding less inventory and moving to cheaper locations. China cuts quarantine period but tourist and business travel still low. Mainland sales improving gradually following lockdowns.
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