Rapaport Weekly Market Comment

US sanctions prohibit imports of Russian rough and polished but allow polished diamonds from Russian-mined rough if they were cut elsewhere. Supply decline unlikely as Alrosa clients find alternative payment methods for next week’s contract sale. JVC warns that US may broaden ban to include transformed polished. EU and UK import sanctions expected. Rapaport issues statement. Retailers considering ethical stand on Russian-sourced diamonds. Market cautious due to Ukraine crisis, US inflation and China Covid-19 spike. Shenzhen lockdown restricting diamond trade. Jewelry sales +22% in Feb., Mastercard SpendingPulse says. India Feb. polished exports +14% to $2B, rough imports +40% to $2.1B.

Fancies: Market robust. Good demand across all sizes. 1.20 to 3.99 ct., F-J, VS-SI is hottest category and seeing scarcities. 0.30 to 0.99 ct. improving in VS and better clarities. Fancies below 0.30 ct. showing significant gains since Diwali. Supply shortages supporting prices. Retailers offering broader product ranges as consumers seek alternative shapes. Growing interest in fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds, Princesses, long Radiants and Marquises. Oversizes trading at higher prices than usual. Excellent shapes commanding premiums. Steady demand in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Activity down since jewelers finished replenishing inventory. Focus on memo and filling specific orders. Bridal segment stable and seeing steady calls for 1 ct., G-I, VS-SI, 3X goods. Buyers cautious due to high prices. Retailers optimistic despite inflation and drop in consumer sentiment. National Retail Federation (NRF) predicts 6% to 8% overall sales growth in 2022.

Belgium: Solid polished trading. Good orders for 1 to 1.50 ct., G-H, VS-SI diamonds. Rough market uncertain ahead of Alrosa sale. Some buyers paid for March goods prior to crisis. Concern rising over retail reaction to Ukraine situation. EU bans diamond, jewelry and luxury exports to Russia.

Israel: Sentiment weakening as sales slow. Suppliers maintaining low inventory and willing to wait before compromising on price. Many unsure about China market and worried about impact of US inflation. Steady demand for 1 ct., G-J, VS-SI engagement ring center stones. Fancy shapes stronger than rounds. Shortage of 1.25 ct. and larger fancies.

India: Geopolitical uncertainty and slow Chinese market dampening mood. US orders down, especially for lower-value items. Steady interest in 0.30 to 1 ct., D-G, VVS1-VS2 dossiers. Suppliers showing more price flexibility. Sanctions on Russian goods have cooled rough trading. Local jewelry business solid during ongoing wedding season, but rising gold prices repelling some buyers.

Hong Kong: Market quiet due to regional spread of Covid-19, volatility of Hong Kong Stock Exchange, and unstable global situation. Government tightening virus measures; many retail stores closed. Dealers focusing on other southeast Asian consumer markets amid sluggishness at home. Chinese demand weak, with best business coming from 0.30 to 0.70 ct., D-J, VG+ diamonds.