Industry News by Nemesis

Rapaport Weekly Market Comment

January 27, 2017

Market hoping next week’s Spring Festival will signal renewed growth in the Chinese jewelry market. Diamond manufacturing increasing despite sluggish U.S. post-holiday demand. Profit margins under pressure as rough prices rise at larger-than-expected $720M De Beers sight. Miners anticipate strong rough market in 2017. ALROSA plans 2017 production +6% to 39.2M cts. Petra Diamonds 1H sales +48% to $229M, production +24% to 2M cts. De Beers 2016 sales volume +55% to 32M cts, average price -10% to $187/ct., production -5% to 27.4M cts. Chow Sang Sang warns 2016 profit fell 30%-40%. Blue Nile unveils diamond buyback scheme. David Block to replace Uzi Levami as Sarine CEO.

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 fancy shape demand 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: Trading relatively slow. Some buzz at India Diamond Week in New York with dealers assessing available inventory and prices rather than closing deals. Trade anticipating steady first quarter with jewelers expected to replenish inventory sold during holiday season. Retailers preparing for Valentine’s Day with heavy promotions for engagement and wedding jewelry. 

Belgium: Polished market quiet with rising concerns about profitability following price increases at De Beers sight. Steady demand for 1 ct., D-F, IF-VVS, RapSpec A2+ diamonds to satisfy European luxury demand. Commercial qualities stable. Steady rough trading with large volumes available at mid-single-digit percent premiums. 

Israel: Quiet market as dealer trading has slowed. U.S. demand is order-specific while suppliers wait for larger post-holiday inventory requests. Far East demand expected to remain quiet until Hong Kong show (Feb. 28). Stable demand for 0.30 to 0.89 ct., D-J, VVS-I2 diamonds. Trading slow in better-quality RapSpec A2+ goods, despite steady interest from buyers as suppliers refuse higher discounts. 

India: Polished trading cautious with buyers uncertain about prices. Shortages in select categories but large volume of goods are in production. Polished inventory projected to rise in time for Hong Kong show (Feb. 28) after large De Beers sight. Manufacturing profit under pressure. Market starting to acclimate to demonetization but small businesses still cautious amid tight liquidity. Steady demand for 0.30 to 3 ct., D-H, SI, RapSpec A3+ diamonds. 

Hong Kong: Dealer and wholesale markets quiet with most companies on vacation for next week’s Chinese New Year festival (Jan. 28). Isolated orders for larger 1 to 5 ct. stones ahead of the season but the focus is now on consumer demand. Optimism in mainland China, while Hong Kong retail remains weak. Consumers shifting to lower price points with 0.30 to 1 ct., G-J, SI, RapSpec A3+ diamonds gaining popularity.


Source: Rapaport

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