Industry News by Nemesis

Rapaport Weekly Market Comment

January 21, 2017

Sentiment improving as jewelers begin stock replenishment after mediocre holiday season. Independents outperform majors and online takes significant market share from physical stores. China waking up for ‘Year of the Rooster’ with rising expectations for Jan. 28 Golden Week. China doing much better than Hong Kong. Luk Fook 3Q same-store sales -10% with China +5%, Hong Kong -11%. Rough trading steady with continued weakness in lower-quality goods due to India demonetization problems. Price-sensitive buyers moving to HPHT synthetics instead of lower-quality natural diamonds. India Dec. polished exports +23% to $1.2B, rough imports -5% to $1.5B. Richline buys The Aaron Group. 

Fancies: Fancy-shape demand improving slightly with shortages of fine-quality, large Pears and Ovals. Cushions making comeback. Emeralds selling better than Princesses. Some demand for big fancy shapes, but buyers extremely picky. U.S. demand steady, Far East weak. Large 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 improving after quiet holiday period. New York dealers preparing for India Diamond Week in DDC (Jan. 23 to 26). Steady demand for 1 ct., G-H, VS2-SI2, RapSpec A3+ diamonds. Retailers restocking ahead of Valentine’s Day but diamond demand remains selective and price sensitive. Jewelers assessing how to compete with online growth. 

Belgium: Steady activity with dealers gaining confidence for 2017. U.S. demand stable, Europe weak. Stable demand for 1 ct., G-J, VS-SI, RapSpec A3+ diamonds. 0.30 ct. to 0.40 ct. improving. Fancy color diamonds firm. Selective demand for fancy shapes with shortage of top-quality goods. Rough trading stable during De Beers sight week with concerns about low profit margins. 

Israel: Trading quiet. Dealers still assessing holiday season as memo goods are slowly returned. Buyers shifting to lower price points with steady U.S. demand for J-K, SI-I1 goods. Shortage of top-quality diamonds for high-end. Dealers moving online with positive results on James Allen and Blue Nile (B2C) platforms. Rough trading stable during De Beers sight. 

India: Trading improving with foreign buyers looking for bargains in Mumbai. Shortages in select categories as fresh post-Diwali supply still in production. Rough demand steady as export-focused factories raise production levels. Smaller manufacturers cautious due to liquidity squeeze. 

Hong Kong: Dealer market quiet as wholesalers close for the Chinese New Year. Some last-minute orders with steady holiday demand for 0.30 to 1 ct. E-J, VVS-SI RapSpec A2+ diamonds. Good demand for better-quality fancy color diamonds and high-end gemstones. Rising holiday expectations in mainland China as major jewelers report growth compared to last year’s lows. Hong Kong remains weak with government relaxing visa requirements to boost tourist traffic. 

 

Source: Rpaport

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