Rapaport Weekly Market Comment
Mar 5, 2020 10:58 AM

Sharp decline in diamond trading amid fears coronavirus will lead to global slowdown. Midstream inventory losing value as manufacturers consider deeper discounts to raise liquidity. Polished prices falling due to China shutdown, with 1 ct. RAPI -1.6% in Feb. De Beers allows deferral of Chinese goods as sales -28% to $355M at Feb. sight. De Beers to customize sightholder supply for dealers, manufacturers and retailers starting in 2021. Belgium Jan. polished exports -22% to $605M, rough imports +14% to $829M. Baselworld canceled due to virus, JCK Las Vegas shows still on. Martin Rapaport to give Diamond Market Challenges webinar Thursday Mar. 19 at 10 a.m. GMT and 12 p.m. EST.

Fancies: Some weakness in fancy shapes below 1.25 ct., but overall demand more stable than rounds since fancies are not as popular in China. Pears slower due to sluggish Hong Kong market. Ovals are strongest shape, driven by US fashion jewelry demand. Well-shaped and fine-cut fancies have become profitable niche with good demand and strong prices, especially Ovals, Emeralds and Pears. Emeralds above 2.50 ct., D-G, VVS2-VS2 also selling well. Shortage of top-make fancies 1.50 ct. and larger. US sustaining market for commercial-quality, medium-priced fancies. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Polished trading weak, ending the positive momentum that started off the year. Overseas dealers trying to sell in New York as Hong Kong and China reach a standstill. Single stones for engagement rings supporting the market. Shortage of melee, G-I, I2-I3 goods. Jewelers focused on bridal ahead of summer wedding season, with consumers cautious following stock-market slump.

Belgium: Dealers avoiding inventory buildup during coronavirus uncertainty. Foreign buyers staying away. Dossiers trading at deep discounts. Some demand for round, 2 ct.+, H-I, IF-VS2 diamonds and for well-cut pears and ovals. Sluggish rough market following small De Beers sight.

Israel: Activity slow with virus impacting demand among Far East suppliers. Businesses and bourse closed over March 2 national election public holiday. Suppliers concerned about decline in inventory value. Fewer orders for round, 2 ct.+, D-F, IF-VVS goods. Rough trading quiet.

India: Liquidity tight as companies prepare accounts ahead of March 31 financial year-end. Coronavirus affecting cash flow, with Chinese clients delaying payments or returning unsold goods. Travel restrictions reducing presence of foreign buyers in Mumbai. Strict customs controls and volatile rupee (-2.6% since February 1 to INR 73.4 / $1) creating challenges for cross-border trade. Steady supply of new polished coming to market from rough bought at high prices in January.

Hong Kong: Wholesale and retail very slow. Orders from China have stopped; those from broader Asia Pacific market, including Japan and Singapore, have declined. Chinese factories have resumed operations at reduced capacity to meet demand from online retailers. Dealers concerned that impact on trading will spread to US and Europe. Jewelry stores remain either closed or operating fewer hours with skeleton staff.

Mar 12, 2020 10:58 am

Diamond industry facing severe liquidity crisis as coronavirus spreads to US. Suppliers uncertain about prices as buyers push for deeper discounts. Jewelers holding large inventory and have scaled back polished purchases. Manufacturers are advised to stop buying rough and hold cash until conditions stabilize. Slump in oil price (-32% since Mar. 5) and stock market (Dow -10%) reducing consumer wealth and luxury demand. Chow Tai Fook Jan./Feb. sales -60% in Hong Kong & Macau, -42% in China. Belgium Jan./Feb. polished exports to the US -35%. Martin Rapaport to give Diamond Market Challenges webinar Thursday Mar. 19 at 10 a.m. GMT and 12 p.m. EST. Register at rapaport.com/webinar.

Fancies: Pears slower due to collapse of Hong Kong market. Weakness in fancy shapes below 1.25 ct., but overall demand more stable than rounds since fancies are not as popular in China. Ovals strongest shape, driven by US jewelry demand. Some demand for Emeralds above 2.50 ct., D-G, VVS2-VS2. Some shortage of top-make fancies 1.50 ct. and larger. US sustaining market for commercial-quality, medium-priced fancies. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Sentiment very weak as spread of coronavirus sparks stock market slump and shift to stay-at-home economy. New York’s JA show and MJSA expo canceled due to pandemic. Bridal supporting the market for 1 ct., G-J, VS-SI diamonds, as February through May is a popular period for engagements. Other categories sluggish. Consumers moving to lower price points.

Belgium: Very little activity amid uncertainty about impact pandemic will have on the market. Polished exports -42% to $1.2 billion in January-February due to drop in shipments to Hong Kong and US. European luxury struggling as sales slide and lockdown in Italy affects supply chains. Some rough demand during Alrosa monthly sale, with dealers focused on goods suitable for the US.

Israel: Foreign buyers absent as all visitors to Israel must enter two-week quarantine. Local suppliers also avoiding travel. Coronavirus has delayed delivery of goods and forced dealers to work from home. Government has relaxed regulations on diamond shipments between areas affected by outbreak after polished exports fell 73% in February. Dealers took one-day vacation over Purim festival.

India: Market quiet, with very few customers visiting from overseas due to virus. Some traders took vacation over Holi festival. Polished suppliers under pressure as inventories rise and prices soften. Demand down for SI-clarity and better diamonds. Some interest in I1 among local jewelers. Manufacturers have reduced polished production in response to the decline in orders. High gold prices and rupee depreciation (-2.7% since March 1 to INR 74.2/$1) weighing on domestic demand.

Hong Kong: Dealer trading stalled. Retail jewelers have reopened stores that were closed when coronavirus broke, but sales remain slow due to weak consumer sentiment and drop in tourist traffic. E-commerce retail also declined but less affected by the downturn. Jewelers holding large inventory and don’t need to buy goods. China manufacturing has resumed but is focusing more on lower-cost gemstone and gold jewelry.

Financial Data
Metals
Gold 1,526.62 -3.44%

Silver 13.16 -20.15%

Platinum 714.56 -7.20%

Palladium 1,724.86 -7.15%

Currencies
Euro $1.12 +0.15%

Pound $1.23 -2.54%

Yuan($) 7.00 -0.36%

Rupee($) 74.22 -0.12%

Indices
S&P 500 2,901.52 +0.01%

FTSE 100 7,432.42 -1.11%

Hang Seng 27,906.59 -0.91%

Shanghai 2,725.25 -0.46%

Sensex 38,645.07 -0.12%

Stocks
Tiffany & Co. $127.94 +0.36%

Signet Jewelers $14.18 +8.08%

Chow Tai Fook HKD 6.05 0.00%

LVMH €314.90 +4.44%

Petra Diamonds GBX 2.20 +7.32%

Rapaport Weekly Market Comment
Mar 19, 2020 10:58 AM

Diamond markets under pressure as coronavirus pandemic spreads economic crisis and reduces demand. Declining stock and commodity markets rattle consumer confidence. US retail shutting down as Tiffany & Co., Macy’s, Saks, J.C. Penney close stores, signaling dramatic shift to digital stay-at-home economy. Polished trading stalled due to travel restrictions and fear of falling prices. JCK Las Vegas shows postponed. Rough prices fall estimated 10% to 25% at March auctions. Diamond industry must adapt to new reality and find ways to keep B2B market alive in these difficult times. We must embrace our digital future and recognize that diamonds are a unique store of value.

Fancies: Fancy shapes sluggish as coronavirus hits US, the strongest market for commercial-quality, medium-priced fancies. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory levels still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: COVID-19 shuts down New York market. Diamond Dealers Club closed. Many dealers operating with limited teams and reduced hours. Cancellation of trade shows signals weak outlook for the coming months. Dealers hoping for steady orders when crisis ends. Retail slow as major jewelers temporarily shut stores.

Belgium: Trading halls closed to avoid spread of coronavirus. Government recommends working from home, but scheduled tenders still taking place. European retail at a standstill as countries tighten restrictions on movement. Business moving online. AWDC co-hosting virtual trade fair with Israel Diamond Institute (March 30 to April 3).

Israel: Exchange trading floor closed. Limited attendance at bourse complex after government tells non-essential workers to stay home. Israel Diamond Exchange (IDE) discounting membership fees for two months as business grinds to a halt. Dealers not making sales; crisis now affecting suppliers to the US and Europe along with those operating in the Far East.

India: Demand low and polished suppliers under pressure as overseas retailers and trading centers cease operations. Government taking precautions against COVID-19 as cases rise. Some companies working reduced hours or with fewer staff members. Surat industry decides against shutdown in effort to avoid further damage to the sector. Liquidity tight as businesses prepare accounts ahead of March 31 financial year-end.

Hong Kong: Sentiment weak due to global slowdown and second wave of local virus cases. Domestic demand sluggish after pandemic and year of protests leave economy crippled. Retailers focused on clearing inventory rather than buying. Tourist spending down, with arrivals from mainland China -54% to 2.5 million in January.

Hmmm domnievam sa tento segment tiež padne do peknej recesie na určitý čas...

Financial Data March 30, 2020
Metals
Gold 1,622.40 -0.42%

Silver 14.12 -1.92%

Platinum 729.92 -1.04%

Palladium 2,241.29 -4.32%

Currencies
Euro $1.11 +0.45%

Pound $1.24 +1.71%

Yuan($) 7.09 +0.26%

Rupee($) 75.26 +0.60%

Indices
S&P 500 2,901.52 +0.01%

FTSE 100 7,432.42 -1.11%

Hang Seng 27,906.59 -0.91%

Shanghai 2,725.25 -0.46%

Sensex 38,645.07 -0.12%

Stocks
Tiffany & Co. $127.44 -1.30%

Signet Jewelers $7.90 -17.02%

Chow Tai Fook HKD 5.57 +2.01%

LVMH €363.70 +0.06%

Petra Diamonds GBX 1.13 -5.38%

Rapaport Weekly Market Comment
Apr 2, 2020 10:58 AM

Diamond markets under continued pressure and facing severe liquidity crisis as jewelry retail, manufacturing, trading and mining companies shut operations during COVID-19 lockdown. Trading limited to online deals, with opportunistic buyers pushing for even higher discounts. 1 ct. RAPI -6.8% in March. China business reopening amid new coronavirus reality. Signet Jewelers temporarily lays off workers, settles $240M shareholder lawsuit. Alrosa allowing 100% deferrals at next week’s sale. Gem Diamonds sells $12M at new flexible rough tender for large stones. Las Vegas Couture and Antique Jewelry & Watch shows canceled. Rapaport Group announces shift to monthly publication of Rapaport Price List. The next issue of the Price List will be published on May 1.

Fancies: Fancy shapes sluggish as coronavirus hits US, the strongest market for commercial-quality, medium-priced fancies. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: Retail and dealer markets limited to e-commerce as Fifth Avenue and 47th Street diamond district shut doors. Large chains laying off workers and expecting lengthy store closures. Jeweler Support Network created to help small businesses cope.

Belgium: Shutdown continues as Europe fights coronavirus. Government and banks approve program to aid businesses struggling with liquidity during pandemic. Lenders agree to postpone loan repayments until September 30, with the state guaranteeing additional one-year credit lines.

Israel: Country on lockdown ahead of weeklong Passover holiday, which starts April 8. Sentiment weak as US and European markets remain closed. Companies with online capabilities suffering now that physical trading has dried up.

India: Polished production and trading drastically reduced amid nationwide quarantine restrictions to curb outbreak. Cancellation of De Beers sight will vastly reduce rough imports during this period. GJEPC donates $6.7 million to help large number of workers affected by the crisis.

Hong Kong: Stores have reopened but are seeing very low traffic amid reports of second wave of virus cases. Retail sales of jewelry and other hard luxury down 79% in February to HKD 1.56 billion ($200.6 million) due to quarantine rules for visitors from mainland China. Weak outlook for tourism and local demand.

Metals
Gold 1,651.67 +0.19%

Silver 15.08 +0.34%

Platinum 745.76 +0.77%

Palladium 2,198.36 +0.76%

Currencies
Euro $1.09 -0.23%

Pound $1.23 -0.17%

Yuan($) 7.06 +0.26%

Rupee($) 75.87 +0.37%

Indices
S&P 500 2,901.52 +0.01%

FTSE 100 7,432.42 -1.11%

Hang Seng 27,906.59 -0.91%

Shanghai 2,725.25 -0.46%

Sensex 38,645.07 -0.12%

Stocks
Tiffany & Co. $128.40 +0.18%

Signet Jewelers $6.80 +6.25%

Chow Tai Fook HKD 5.69 +5.37%

LVMH €339.75 +4.52%

Petra Diamonds GBX 2.43 -8.49%

RAPAPORT... Total diamond sales at Alrosa fell 59% to $152.8 million in March, as the coronavirus pandemic led to a slowdown in demand.

Rough-diamond proceeds dipped 60% year on year to $148.7 million for the month, while polished revenue dropped 49% to $4.1 million.

“March demand for rough and polished diamonds in all key markets demonstrated a steep decline,” Alrosa deputy CEO Evgeny Agureev said last week. “The uncertainty in February was followed by severe restrictions and even the suspension of trading because of border closures and quarantine measures across the world. Needless to say that this has had an extremely adverse effect all along the diamond pipeline.”

Alrosa implemented flexible sales during the month, which allowed its long-term clients to make fewer purchases than usual. While most of the Russian miner’s customers stuck to their contracts, several companies switched to spot sales, which allowed them to choose the amount they purchased, rather than receiving a set portion of goods.

In the first quarter, Alrosa’s rough and polished sales slumped 10% to $904.2 million. Revenue for rough fell 11% to $881.2 million, while polished grew 41% to $23 million. Polished sales included those from Russian manufacturer Kristall, which Alrosa acquired at the end of 2019.

Agureev expects the market to pick up soon, as China has shown signs of recovery from the coronavirus outbreak.

“According to the latest news, the epidemiological situation in China, one of the major diamond markets, is gradually improving and moving towards less strict quarantine measures,” he said. “This gives us the hope that this market will be the first to start recovering…demand in the [near] future.”

Seperately, Alrosa donated RUB 166 million ($2.3 million) to help in the fight against COVID-19 in the Yakutia region in which it operates. The money will help provide medical supplies and equipment, it said.

The miner has also launched an internal diamond supply chain management system that will allow the company to comply with Organisation for Economic Co-operation and Development (OECD) due-diligence guidance for responsible supply chains, it added.

Image: Rough-diamond sorting. (Alrosa)

Obrázky:

Rapaport Weekly Market Comment
Apr 16, 2020 11:02 AM By Rapaport News

Diamond industry under stress as mining, manufacturing and retail centers remain closed during COVID-19 lockdown. US government starts $2.2 trillion stimulus to help relieve liquidity pressures as new unemployment claims exceed 20 million in April. US retail sales slide -6.2% in March. China retail reopening to light traffic. Chow Tai Fook 4Q China same-store sales -50%, Hong Kong/Macau -65%. Some junior miners deem operations uneconomical at current low rough prices. Petra Diamonds prices -27% in March. Alrosa reduces inventory -6% to 21.1 million carats in 1Q, sells $149M rough and $4.2M polished in March. Exhibitors clash with Baselworld over refund policy as watch majors Rolex, Patek Philippe, Chanel, Chopard and Tudor pull out.

Fancies: Fancy shapes sluggish amid lockdown of US retail, the strongest market for commercial-quality, medium-priced fancies. Weakness across all categories, including top makes and large sizes, as luxury brands temporarily shut stores. Downtrend due to external forces beyond industry’s control and affecting all products. Inventory still low in some categories of Pears and Ovals, but very little demand. High availability of other categories, with Cushions showing similar price declines to rounds. Off-make, poorly cut fancies illiquid and difficult to sell.

United States: New York trading limited to sporadic online deals amid city shutdown. Retailers closed nationwide, with major jewelers furloughing workers. Many small businesses applying for government loans. Trade organizations focusing on online educational programs, including webinars by the Gemological Institute of America (GIA) and Jewelers of America (JA).

Belgium: Antwerp’s four bourses remain shut. AWDC to host webinar on April 17 explaining government support measures during COVID-19.

Israel: Short week due to seven-day Passover festival that ended on Wednesday. Israel Diamond Exchange president Yoram Dvash outlines benefits available to diamantaires in Facebook post.

India: Government extends lockdown to May 3. Some manufacturing sectors could resume before then. Gem and jewelry exports decline 41% in March.

Hong Kong: Wholesale and retail markets reopening with caution but not expecting a quick recovery. Dealers assessing polished price levels and availability. Retail inventory levels higher than normal, with Chow Tai Fook reporting 15% year-on-year inventory increase on February 29. Hong Kong shows rescheduled for August.