Industry News by Nemesis

Rapaport Weekly Market Comment

March 17, 2016

Rounds: Big-stone demand uncertain as Basel show opens. Finest cut large diamonds in short supply and selling but lower qualities weak. Rough auction prices too high and trading cooling off as polished production increases. ALROSA 2015 revenue +8% to $3.3B, profit of $471M vs. loss of $246M in 2014. Gem Diamonds 2015 revenue -8% to $271M, profit +57% to $52M. China’s 2015 polished imports -14% to $6.7B, exports -21% to $2.2B. U.S. Jan. polished imports -3% to $1.8B, exports -9% to $1.3B. India’s Feb. polished exports +2% to $2.3B, rough imports +37% to $1.6B. Sotheby’s to auction Lucara’s 1,111ct. Lesedi La Rona rough diamond. De Beers launches U.S. diamond reselling business. 

Fancies: Pears and Ovals in short supply due to limited production. Emeralds improving. Fairly good market for large top-quality fine-cut fancy shapes but buyers are extremely picky and supply is very tight. Cushions steady, Princess and Hearts slow. Overall fancy shape prices relatively soft. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1ct. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.

United States: Polished trading steady. Large-volume suppliers find it difficult to replace inventory with shortages of the right goods. Dealers are looking for stock but also concerned about potential polished oversupply as new goods enter the market. Steady demand for 1-3ct., G-H, SI1-I1 diamonds. Large-stone market relatively weak. Light traffic at JA show with little interest from diamond dealers and wholesalers. 

Belgium: Mixed sentiment in Antwerp. Steady demand and tight supply for top-quality RapSpec A2 diamonds. Lower qualities difficult to sell and stuck in inventory. Good demand for 1ct., H, SI. Stable demand for 0.30-0.70ct., D-M, VS-SI diamonds. 3ct.+ weak with buyers pushing for better discounts. Rough trading stable with rising concern about high auction prices. 

Israel: Improved sentiment after Hong Kong show but trading relatively quiet. Suppliers holding back on goods and using memo to sell to end consumers where they can get better prices than on the dealer market. Stable demand for RapSpec A2+ 0.30-1.99ct., D-H, VS-SI diamonds. Mixed sentiment among large-stone dealers with many at this week’s Basel show. Fancy shapes steady with good demand for better-quality ovals, pears and emeralds. Rough demand steady despite high auction prices. 

India: Polished trading quiet and activity slowed after Hong Kong show. Suppliers left with large inventory of lower-quality goods that are difficult to sell. Domestic market in upheaval with jewelers striking against government 1% excise tax and introduction of new tax authority into jewelry industry. Diamond manufacturers supporting jewelers with one-day strike on March 17. Manufacturers slowly increasing polished production with inventory levels marginally higher. Rough trading slowed following Jan./Feb. hype with premiums on the secondary market stable at mid-single digit percentages. 

Hong Kong: Trading steady and sentiment improving. Last week’s show provided momentum to the market. Stable demand for 0.30-1ct., G-J, VS-SI diamonds. Improving demand from Hong Kong-based jewelers but local retail market remains cautious. Demand from Mainland China is selective and limited to filling orders. Limited inventory purchases. 

 

Source: Rapaport

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