Industry News by Nemesis

Rapaport Weekly Market Comment

September 18, 2016

Positive atmosphere at Hong Kong show with trading slightly better than low expectations. Buyers maintain cautious outlook for holiday season. Far East retailers requiring less inventory as China expansion slows. Suppliers holding prices to minimize losses from expensive rough. De Beers estimates 2015 global rough sales -30% to $13.7B, rough production -0.7% to 141M cts. with value -10% to $17.5B, average price -8% to $124/ct. Insight report notes millennials driving growth but diamond content in jewelry sales -2% to $24.7B last year. Dominion 2Q sales -24% to $160M, loss of $33M vs. loss of $18M a year ago. Richemont jewelry sales -16% in first five months, warns 1H profit -45%. 

Fancies:Markets slow. Large 5 ct.-plus fine-quality goods getting more interest. Ovals and Pears steady. Emeralds selling with improving large-stone demand. Princess and Hearts slow. Top-quality fine-cut fancy shapes OK but buyers are extremely picky. Overall fancy shape prices relatively soft. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1 ct. 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: Stable market with dealers watching for trends from Hong Kong show. Buyers selective and pushing for higher discounts. Suppliers focused on liquid items as demand is narrower and quieter than usual for this time of year. Steady demand for 1 ct. H-K, VS-SI diamonds. Retailers preparing holiday inventory. 

Belgium: Positive sentiment with large delegation of Antwerp suppliers holding firm prices at Hong Kong show. Pointer sizes stable. Steady demand for 0.90 to 2.99 ct., D-G, VS-SI, 3X, diamonds. Profitability tight after rough premiums increased in dealer market during August / September sight. European luxury jewelry market uncertain ahead of holiday season. 

Israel:Dealers relieved at steady Hong Kong show following long, inactive summer. Large-stone demand specific with lack of available top-quality, 5 ct.-plus (RapSpec A2+, 3X, none) diamonds. Steady dealer demand for 0.30 to 0.50 ct., G-J, VS-SI, 3X diamonds. U.S. orders stable as retailers prepare for holiday season. Far East demand cautious as major jewelers cut back on inventory. 

India: Polished market stable with suppliers maintaining prices at Hong Kong show. Indian buyers looking for bargains. Melee market okay with pockets of good demand. Polished production steady before Diwali break despite low manufacturing margins. Better to buy polished than manufacture rough. 

Hong Kong: Busy activity with steady traffic at Hong Kong show. Conservative Far East buyers limiting inventory orders. Supplier discounts restricted by higher rough premiums. Major jewelers expect continued volatility with restrained outlook for October 1 National Day Golden Week. Hong Kong retail weak, China stable.

 

Source: Rapaport

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