Rapaport Weekly Market Comment

Sentiment positive despite seasonal slowdown. Dealers filling orders but struggling to replace goods at current price levels. Polished prices firm even as inventory rises. Buoyant US retail driving the recovery; July jewelry sales +83%, reports Mastercard SpendingPulse. Overseas exhibitors frustrated by restrictions preventing travel to Las Vegas shows. Manufacturing profit margins under pressure following recent rough price hikes. Alrosa sells $334M of rough in July. Gem Diamonds 1H sales +41% to $104M, Letšeng mine average price +10% to $1,886/ct. Lucara Diamond 2Q revenue of $46M vs. $8M last year, profit of $6M. US June polished imports +93% to $1.6B, exports +139% to $1.2B.

Fancies: Market robust. Prices firming across most sizes and categories amid shortages and growing fancy demand. Retailers offering wider product ranges as consumers seek alternative shapes. Dealers seeing increased sales of fancy-shape engagement rings. Rise in orders for Ovals, Pears, Emeralds, Princesses, long Radiants and Marquises. Ovals and Cushions closing price gap with Rounds. Oversizes trading at higher prices than usual. Excellent cuts popular and commanding premiums. Steady orders in China helping the market. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Good retail sales making for upbeat trading. Dealers preparing for JCK Las Vegas show (August 27 to 30), although most Belgian, Indian and Israeli diamond suppliers unable to attend due to travel restrictions. Strong memo sell-through across full range of sizes. Steady demand for 1 to 3 ct., G-J, SI-I1 goods as government stimulus supports mid-market jewelry spending. Suppliers struggling to replace inventory as prices keep rising. Fancy colors moving well.

Belgium: Business quiet during summer vacation period. Some companies disappointed they can’t attend JCK show due to unsuccessful US entry applications. No national pavilion at fair amid travel uncertainty. Rough trading steady.

Israel: Dealers enjoying robust US demand as holiday selling period approaches. Retailers buying for inventory, boosting optimism among suppliers. Bourse activity more subdued than in previous weeks as Covid-19 cases rise; possibility of fourth lockdown. July polished exports +68% year on year but showing slower growth than in second quarter.

India: Trading has cooled amid summer break in some overseas markets. Steady US and Hong Kong orders; strong appetite for lower-value diamonds under 0.20 ct. Customers willing to pay more to secure goods as travel restrictions limit buying options. Emeralds and pears moving well. Surat manufacturing units gradually raising production ahead of holiday season.

Hong Kong: Stable market with shortages in select categories of polished. Sellers offering minimal price flexibility. Dealers focused on specific items; good demand for 1 ct., D-J, VS-SI2, 3X diamonds. China retail steady as consumers continue to spend locally instead of traveling. Larger jewelers expanding mainland store networks amid positive outlook for fourth-quarter sales. Hong Kong luxury retail struggling due to lack of tourists.