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Weekly Market Report

DIAMOND MARKET OVERVIEW

Improved retail sales figures and tourist inflow in Hong Kong helped prop up expectations ahead of the Hong Kong jewellery trade show this coming week. Following two years of sagging retail sales in Hong Kong, July showed a rebound with a 4% rise in retail sales and a 12.9% jump in July jewellery sales, versus a 0.8% dip in June. “The pickup was underpinned by robust local consumption demand and further improvement in inbound tourism,” the Hong Kong government said in a statement. Meanwhile, the underlying mood in the wholesale market is cautious, amid reports of large diamond companies facing financial difficulties and high inventory levels in the main cutting centre India. The oversupply of polished may see some companies offloading inventory at discounted prices ahead of the annual Diwali sales. Meanwhile, the main polishedprices index ended the week down, opening at 116.28 on Friday, from Monday’s opening at 117.59.

ROUGH MARKET

Overall sentiment turned from cautious to negative. Traders in the secondary market in Antwerp and Israel reported a sharp drop in rough trading over the past week. In turn, contracted buyers at De Beers and Alrosa reported losses on sales in the secondary market. There have been a number of reported bankruptcies in the past few weeks, affecting the midstream and major banks financing the trade.  Rough prices are likely to remain under pressure until the excess inventory in the pipeline has been cleared. “Businesses in the diamond industry’s midstream segment are adopting a watchful approach as attention now turns to the Hong Kong Jewellery & Gem Fair in mid-September,” De Beers said in a statement.

CORPORATE AND EVENTS

De Beers said it sold $ $505 million of rough during the seventh sales cycle of 2017, compared to $576 million during the same period last year. Bruce Cleaver, CEO, De Beers Group, said: “As expected, rough diamond sales were somewhat lower in the seventh cycle of the year, with some midstream demand having already been brought forward into Cycle 6 due to Diwali being earlier than normal in 2017. 

De Beers is reviewing its approach to the development of smaller mining projects as the diamond giant considers its future strategy in a situation where there have been no major diamond discoveries in the past 30 years, miningmx.com reported. No ‘biggies’ are expected to be found over the next decade or so either despite the intensive exploration efforts by De Beers and other diamond companies – both major and junior, said the miningmx.com report.

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