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Rapaport Market Report

November 26, 2015

Nov 26, 2015 6:00 PM  
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Rapaport calls for resignation of De Beers CEO and 30-50% rough price cut to inject liquidity and profits into diamond trade. De Beers stops buying and paying Botswana for rough, 2H15 De Beers rough sales expected to plummet at least 60%, possibly 70% Y/Y. (See Rough Bubble Bust article.) U.S. retail okay as holiday season starts. Dealers hope for last-minute orders but concerned as jewelers inventories are high. ALROSA 3Q sales -4% to $619M, loss -47% to $231M, inventory ~20M cts. worth ~$1B ($50/ct.). Signet 3Q sales +3% to $1.2B, profit of $15M vs. loss of $1.3M. Tiffany 3Q sales -2% to $938M, profit +137% to $91M. Chow Tai Fook 1H sales -4% to $3.6B, profit -43% to $201M.

Fancies: Demand soft. Pears, Ovals and Cushions steady, Princess, Hearts slow. Prices for curves improving slightly. U.S. demand supporting market for commercial-quality fancies, especially for sizes under 1-carat. Far East fancy demand weak. Buyers are very selective and insisting on excellent-shape proportions. Significant price differentials between excellent- and average-cut fancies. Off-make, poorly-cut fancies illiquid and very hard to sell, even at very deep discounts.

United States: New York trading quiet as many businesses close early for long Thanksgiving weekend. Demand weaker than usual before holiday but dealers still hoping for pre-Christmas orders. Retail buyers pushing for higher discounts on lower quality diamond jewelry. Good demand for branded engagement ring diamond jewelry amid shift to lower qualities. De Beers launches holiday generic advertising campaign.

Belgium: Sentiment much better than few weeks ago with holiday demand and shortages supporting the market. Very few fresh goods on the market. Existing inventories sufficient to fill holiday demand despite reported shortages. Good demand for scarce, eye-clean 1-1.25ct., I-K, SI diamonds and for dossiers. 3-4ct. weak. Rough trading very quiet with dealers and manufacturers frustrated by lack of profit.

Israel: Gradual improvement continues with dealers focused on filling U.S. holiday demand. Some orders difficult to fill due to shortages. Dealers waiting for India to return to full operation after Diwali. Limited supply of nice RapSpec A2+ (3X, none) diamonds. Overall trading below previous years. Holiday season difficult to gauge. Orders not coming in like previous years. Suppliers need to proactively push goods,

India: Trading slowly returning to normal after Diwali with manufacturers expected to return next week. SI-I2 demand strong for U.S. market with some improvement in VS diamonds. Suppliers holding firm prices for confirmed orders but major retailers pushing for significantly lower polished prices. Shortages supporting prices of select goods. Rough demand very weak with limited manufacturing expected through December. Local demand stable as jewelers anticipate moderate wedding season. Good gold jewelry demand at lower prices.

Hong Kong: Polished trading stable but cautious with some early Chinese New Year demand. Good demand for dossiers but overall market is tough. Suppliers note tight margins on goods that are selling. Low expectations for this week’s Hong Kong Jewellery Manufacturers Association show. Local jewelers holding large inventory as 2015 sales slowed. Mainland China better than Hong Kong and gold selling better than gem jewelry.
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