Diamond Report

Date: February 13, 2020

Diamond Sector News:

Hong Kong shows postponed to May 18-21 as coronavirus impacts global trade. Weak Chinese
New Year sales to reduce 1Q inventory replacement as jewelers are left with large volumes that
didn’t sell. Diamond markets quiet. Polished prices supported by shortages, particularly of 0.30
to 0.49 ct., D-F, IF-VVS2 goods. 1 ct. RAPI -0.4% in Jan. Manufacturers cautious, despite
strong recent rough buying, as oversupply of lower-quality diamonds remains. Russia’s
Eximbank enters diamond lending as Alrosa helps negotiate loan to Dali Diamond. Lucara finds
549 ct. rough at Karowe mine. Martin Rapaport to give keynote presentations at Israel Diamond
Exchange Feb. 10 and Palm Beach Show Feb. 16.

Fancies: Ovals are strongest shape, driven by US fashion jewelry demand. Emeralds above
2.50 ct., D-G, VVS2-VS2 also selling well. Pears slightly slower due to sluggish Hong Kong
market. Princess and Marquise continue to struggle. Well-shaped and fine-cut fancies have
become a profitable niche with good demand and strong prices, especially Ovals, Emeralds and
Pears. Fancies with classic and long ratios trending in fashion segment. Shortage of top-make
fancies 1.50 ct. and larger in all categories except D color. US sustaining market for
commercial-quality, medium-priced fancies. Off-make, poorly cut fancies illiquid and difficult to
sell.

United States: Polished trading stable, but dealers lacking usual first-quarter buzz. Little
inventory buying as retailers focus on memo and online sourcing. Pockets of good demand, with
steady orders for 1 to 1.50 ct., G-J, VS2-I1 diamonds for bridal. Retailers focused on Valentine’s
Day promotions. Consumer confidence rises in January, according to Conference Board index.

Belgium: Market relatively quiet after good January trading. Buyers cautious due to renewed
uncertainty in China. US and European demand stable. Steady orders for 0.30 to 0.60 ct., F-I,
VS2 goods. 1 ct., G-J, VS-SI doing OK. 2 to 4 ct. weak. Rough market slower after strong
January sales.

Israel: Slow market, but improvement anticipated during International Diamond Week (Feb. 10-
12). Dealers focused on US customers amid China slowdown. Steady demand for commercial-
quality diamonds for US engagement rings. Firm prices for 0.30 to 0.49 ct. goods, despite
decline in Chinese orders. Fancy shapes stable, with shortages of fine-cut, 1.50 to 10 ct. pears
and ovals.

India: Cautious sentiment amid tight liquidity and concerns about oversupply. Manufacturers
maintaining low production to avoid flooding the market with goods. Steady demand for 0.30 to
0.50 ct. diamonds. Few overseas buyers in Mumbai after India canceled visas for Chinese
visitors. Trade disappointed by 2020 government budget, which kept import duty on gold at
12.5% and polished diamonds at 7.5%.
Hong Kong: Fewer buyers in the market as government imposes two-week quarantine on
visitors from mainland China following outbreak of coronavirus. Dealers extending Lunar New
Year break or working from home. Chinese jewelers facing sharp sales decline as some cities
are on lockdown. Hong Kong luxury suffers toughest year in decade due to city protests, with
2019 jewelry, watches and clock sales -22% to HKD 66.2 billion ($8.52 billion). Virus quashes
pre-lunar festival optimism.

(Source: Rapaport News)

Diamond Report
Date: February 13, 2020

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