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Rapaport Weekly Market Comment

Aug 8, 2019 10:58 AM   By Rapaport News
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Diamond trade slow due to seasonal lull and market uncertainty. US jewelry sales compensating for weakness elsewhere, but retailers holding less inventory. New US tariffs on China imports to impact jewelers more than diamantaires. Trade war affecting confidence as stock-market wealth declines, with Dow -3% (August 1 to 7). Political protests creating concern for important Hong Kong show. Yuan’s devaluation to CNY 7/$1 and rupee’s slide to over INR 70/$1 raise costs of local China and India diamond buying. Tiffany expands into India, with Delhi store to open in 2H. Titan Company 1Q sales +16% to $737M, profit +11% to $51M. Jewelers of America elects Holly Wesche as new chair.

Fancies: Fancy shapes soft, reflecting slowdown in high-end demand. 3 to 8 ct., I-K, VS-SI1 moving better than rounds as dealers and consumers shift to lower price points. Well-known brands are paying best prices, as are buyers with specific requests. Ovals for fashion jewelry moving well, especially 1.50 and 2 ct., G-H, VS and H-K, SI2. Marquises and Princesses weak despite reduced manufacturing. US sustaining market for commercial-quality, medium-priced fancies under 1 ct. Chinese consumers seeking fancy shapes at better prices. Off-make, poorly cut fancies illiquid and hard to sell, even at very deep discounts.

United States: Slow summer trading. Buyers hesitant to make large inventory orders as prices continue to soften. Stable demand for round, 1 ct., G-H, VS-SI, RapSpec A3+ diamonds. Ovals doing well. Jewelry sales mixed, with focus on bridal and selling to self-purchasing women. Jewelers planning for holiday season and taking more goods on memo.

Belgium: Market very quiet, with bourses officially closed and most dealers on vacation until August 19.

Israel: Traders preparing for next week’s summer break, when bourse will close from August 12 to 22. Dealers reducing inventory and credit lines amid trade war and diamond-market liquidity concerns.Low expectations for September Hong Kong show due to political protests. Demand focused on US market, with steady interest in 0.70 to 1.50 ct., G-H, VS-I1 diamonds. Rough sector quiet; buying and selling polished is yielding better profits than manufacturing rough.

India: Little buzz for IIJS Mumbai show amid reduced emphasis on diamond trading, as well as caution in jewelry sector due to high gold price. Rupee depreciation (-3% this week to INR 71/$1) raising costs for suppliers to domestic market but benefiting large manufacturers that export. Small-stone cutters under pressure from drop in local demand. Polished production well below capacity as manufacturers try to reduce stock and boost liquidity.

Hong Kong: Trade war escalation and currency devaluation fueling uncertainty. Protests impacting diamond activity. GIA dossiers steady, but stones above 1 ct. weak. Some concern that political instability will affect attendance at important September show. Chinese tourist spending set to slow further after yuan depreciation.
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