Industry News by Nemesis

Rapaport Weekly Market Comment

February 9, 2017

Diamond demand stable as reduced supply of polished and higher rough costs support price levels. Over $1B of new higher-priced rough entered the market in January without any increase in polished demand. Oversupply of expensive polished expected. Chinese New Year good for gold, but gem-set jewelry sales stagnate. Chow Tai Fook holiday sales +4% in China, -11% in Hong Kong & Macau. U.S. retailers hoping to tap pent-up diamond jewelry demand over Valentine’s Day. Indian jewelers starting to restock for ongoing wedding season after demonetization froze orders. ALROSA Jan. sales +60% to $365M. Tiffany & Co. CEO Frederic Cumenal resigns after disappointing Christmas. 

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: Slight improvement in NY trading. Dealers managing with lower inventory as retailers start to replenish holiday stock. Steady demand for 1 ct., G-H, VS-SI, RapSpec A2, (3X, none) diamonds. Pears and Ovals the strongest fancy shapes. Jewelers discounting fashion jewelry to boost Valentine’s Day sales. Engagement and bridal segment is steady. 

Belgium: Cautious trading after quiet Antwerp fair. Buyers testing the market by offering deeper discounts but no urgency to buy goods. Suppliers defending prices amid high rough market prices. Steady demand for 1 ct., H-J, VS-SI, RapSpec A3+ diamonds. Improving demand for 0.50 to 0.90 ct., G-H, VS (3X, none) goods. Rough trading stable with reduced supply expected after very large January supplies. 

Israel: Polished trading quieter than expected for this time of year. Hopes that high-profile foreign delegations will raise trading levels at Israel International Diamond Week (Feb. 13-16).Improving demand for top-quality flawless, type IIa diamonds. Concern that luxury houses are limiting purchases of 0.30 to 0.50 ct., D-H, VVS-VS goods. Rough trading cautious as manufacturing margins are tight. 

India: Sentiment improving as impact of demonetization begins to fade. Jewelry retailers starting to buy again after two-month lull as wedding season demand improves. Gold jewelry performing better than diamonds. Diamond buyers cautious with trading expected to rise for Hong Kong show (Feb. 28). Manufacturing levels stable with smaller factories still cautious amid limited liquidity. 

Hong Kong: Wholesale market quiet as dealers slowly return from Chinese New Year vacation. Chinese tourist arrivals steady during the festival but Hong Kong attracting price-sensitive visitors from lower-tier cities. General retail stronger than luxury, while gold demand boosts jewelry sales in mainland China. Stable demand for 0.30 to 0.70 ct., F-H, VS-SI diamonds. Fancy color diamonds and gemstones offering better margins than colorless diamonds. 


Source: Rapaport

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