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Rapaport TradeWire October 9, 2015
Oct 8, 2015 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
October 9, 2015
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HK’s
Golden Week weak as mainland Chinese tourists stay home. Buyers waiting for
price cuts from sellers who need cash. Israel and New York slow as dealers
return from holidays. India remains slow, particularly 1.5 ct.+ goods.
Commercial goods better than high end with 0.50-0.75-ct., H-I moving better
than 1 ct., D-F, VVS goods. Slight price reductions at De Beers sight offset by
changes in size assortments. Buyers not confident with manufacturing down about
50% in lead-up to November’s Diwali festival. Belgium trade showing some signs
of life after sluggish September, with increased U.S., European demand. Bharat
Bourse bans synthetics. U.S. polished diamond imports +4% in August.
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RapNet Data: October 8
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| Diamonds |
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1,299,251 |
| Value |
$8,552,402,454 |
| Carats |
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1,397,886 |
| Average Discount |
-28.46% |
www.rapnet.com
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| The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality. |
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
We are not opposed to trading in synthetic/laboratory-created diamonds and accept that there could be a market for them.
Ernie Blom, president, World Federation of Diamond Bourses
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MARKETS
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United States: New York diamantaires
waiting for signs of price stability before stocking up for holiday season. Retail
sales of round diamonds under 1 ct. remain strong with continuing demand for
ovals and cushions...
Belgium: Antwerp showing some
signs of improvement from September, with European and U.S. buyers filling
anticipated holiday needs...
Hong Kong: Golden Week weak as strong
foot traffic didn’t turn into sales as Mainland tourists stayed home...
India: Market slow and
uncertain as international buyers wait for price stability. Manufacturers’
profit under continuous pressure as De Beers fails to significantly reduce
rough prices...
Israel: Market waking up as diamantaires
return from several weeks of Jewish holidays. Better demand for
commercial goods than high quality certs...
Click here to continue reading
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INSIGHTS
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Look to the Holidays to Gauge the Trade’s Foreseeable Future
If things in the diamond trade were business as usual, strong sales during Christmas and the Chinese New Year in early February would reduce retail inventory and by March bring fresh orders for goods throughout the distribution chain...
Click here to continue reading
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INDUSTRY
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U.S. Polished Diamond Imports +4% in August
U.S. polished diamond
imports increased 3.9% year on year to $1.62 billion in August. The average
price for polished goods rose 5.3% to $1,861 per carat, according to Commerce
Departmentdata
releasedon October
6.
Polished exports fell 16% to $1.34 billion,
resulting in a surplus of $281.6 million compared with a deficit of $33 million
in August 2014.
Rough diamond imports more than doubled in
August to $43 million, while rough exports rose 16% to $31.7 million, leaving
net rough imports at $11.3 million compared with $7.8 million last year. The
net diamond account shows imports exceeded exports by $292 million compared
with last year’s $41.7 million deficit.
During the first eight months of the year, polished
diamond imports rose 1% compared to the same period in 2014 to $16 billion and
polished exports fell 12% to $12.9 billion.
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Bharat Bourse Bans Synthetic Diamond Dealing
The Bharat Diamond Bourse (BDB) approved measures to stem
the sale of synthetic diamonds on its premises going forward, requiring that
only "natural diamonds" be sold at the Mumbai facilities, Rapaport News learned.
The action was approved by "an overwhelming
majority" of the bourse’s members at its annual general meeting, market
representative Shaji Narayanan confirmed in an email on October 1, noting that
BDB is the “first and only diamond bourse to declare its entire premises as a
natural diamond zone.”
The new rule applies to all synthetics, including chemical
vapor deposition (CVD) stones. The disciplinary actions that would be taken
against dealers who violate the new measures were not specified.
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WFDB Supports Bharat Ban, Ethical Synthetics Trade
The leadership of the World Federation of Diamond Bourses
(WFDB) isn't opposed to the synthetic diamond trade, but also takes no issue
with Bharat Diamond Bourse’s decision late last week to ban laboratory-made
stones, including chemical vapor deposition (CVD) stones.
WFDB president Ernie Blom commented in a statement that
“each WFDB-affiliated exchange is within its rights to decide on its policy on
the issue,” clarifying that “the WFDB is not opposed to the trade in such
stones as long as they are fully disclosed.”
“Each of our member bourses, of course, has full
decision-making power regarding which types of diamonds can be bought and sold
within their premises as long as the decisions are made in line with the WFDB's
regulations,” Blom explained.
“We are not opposed to trading in synthetic
laboratory-created diamonds and accept that there could be a market for them. We
only insist that such stones are fully disclosed so that the trade and
consumers know exactly what they are being offered. This is critical in
ensuring consumer confidence.”
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De Beers: China’s Polished Diamond Sales to Jump 3% to 5%
China’s polished diamond sales will grow by 3% to 5% this
year to about $290 million, De Beers Stephen Lussier, head of the Forevermark
brand, said in a Reuters report, reversing an earlier company prediction of
flat revenue for 2015.
Lussier explained that “the bridal business and the gifting
business, particularly amongst younger consumers in China, is really today the
main growth area.”
Forevermark’s like-for-like sales hit a record high in August
2015, after Chinese Valentine’s Day.
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Sarine Launches Super-Fast Mapping Technology
Sarine Technologies released a system for inclusion mapping small
diamonds called Meteor that could increase the speed of scanning to 220 stones
per day.
The Israeli equipment maker, which focuses on technology for
the evaluation, planning, processing, finishing, grading and trade of diamonds
and gemstones, said that the new system was designed to provide “faster,
cost-effective” inclusion mapping for the 0.25- to 0.85-carat segment of rough
diamonds.
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Israel Bourse Gears Up for ‘Rough October Fest'
The Israel Diamond Exchange (IDE) will host a “Rough October
Fest” featuring numerous rough diamond tenders and sales in the Ramat Gan
diamond trading complex.
Rio Tinto will open the proceedings with its tender, to be
held in the trading hall from October 11 to 15. The tender will offer 10.8-plus-carat
and fancy colored rough diamonds through a sealed-bid auction system.
Tzoffey’s tender will run from October 18 to 26, with an
all-African sale of 5- to 10-carat goods, along with special 10.5-plus-carat
stones. De Beers will hold a sale of 5-plus-carat and 10-plus-carat goods from
October 25 to 27.
A “Blue-White Diamond Dealing Day” will also take place in
the IDE trading hall, with traders offering rough diamonds for inspection and
immediate sale, as well as polished goods.
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Dubai Diamond Exchange Sets Financing Seminars
The Dubai
Diamond Exchange (DDE) will hold an inaugural series of seminars to raise
awareness of diamond-financing options and explore ways in which the emirate’s
trade infrastructure and financial institutions can support the industry.
The first of three Dubai Diamond Finance
seminars will be organized at the Almas Tower in Jumeirah Lakes Towers on
October 25. The event will host representatives from diamond manufacturers,
including Dilip Mehta, chief executive officer of Rosy Blue, and Aditya Gandhi,
director of Azure Diamonds.
While “there is a drought when it comes to
finance options available to diamond buyers on a global scale," local
lenders in Dubai are making finance options available, Mehta said.
Davy Blommaert, unit head for precious metals
and diamonds at the National Bank of Fujairah, and Peter Meeus, executive
chairman of the Dubai Diamond Exchange, will chair the discussions.
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RETAIL & WHOLESALE
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Sotheby’s Sells $18.4 Million of Diamonds
Sotheby’s sold $18.4 million worth of diamonds at its recent
two-day Important Jewels sale on September 23 and 24 in New York, including an
emerald-cut, 30.15-carat, F-color diamond ring purchased for $2.6 million,
Blouin Artinfo reported.
A number of lots from the estate of Dolores Sherwood
Bosshard fetched a total of $2.3 million, or nearly double the pre-sale
estimate, including a sapphire and diamond stylized bow brooch by Van Cleef
& Arpels dating back to 1937, which sold for $162,500.
A platinum bracelet by Harry Winston, circa 1960, with diamonds
weighing a total of 101 carats and engraved on the bracelet cluster-style, was
auctioned for $424,000. A cushion-cut, 43.25-carat sapphire framed by round and
marquise-shaped diamonds weighing 2.90 carats sold for $802,000.
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Luk Fook CFO Not ‘Optimistic’ About Golden Week Sales
While Luk Fook stores have seen an increase in store traffic
in the initial days of China’s Golden Week festival, Kathy Chan, the retailer’s
executive director and CFO, cautioned that “I don’t feel we should be
optimistic about the figures” in an interview with Bloomberg Television.
Chan added that gem and jewelry sales in Mainland China are
offsetting a current downturn in Hong Kong and Macau. The majority of Luk
Fook’s more than 1,383 stores are located on the mainland.
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Michael Hill Sales +9.9%, Same-Store Sales +6%
Michael
Hill reported a 9.9% increase in sales to $80.8 million (AUD 112.5 million) for
the three months through September, while same-store sales rose 6% to $76.8
million.
The New Zealand-based retailer has also released
results for the Emma & Roe brand for the first time, with same-store sales
rising 44.6% to $813,964. It said the directors were pleased with sales of the
brand, which is still in the second year of a trial phase, and added that it
plans to open an two new stores in the coming months, bringing the total to 11.
This would take the brand to a critical mass in
the South East Queensland market and give the company the best indication of
its commercial viability, it commented.
Meanwhile, the group said in a statement that
Michael Hill New Zealand same-store sales grew 8.6 per cent in local currency
to $15.6 million (NZD 23.6 million), while same-store sales for the main brand
in Canada nudged up 2.9% to $12 million (CAD 23.6 million). The group opened
three new Michael Hill stores, giving a total of 291 stores trading at the end
of the quarter.
U.S. same-store sales for the brand were up by
just 1.2% to $2.1 million.
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MINING
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Firestone’s Sale of Botswana Assets Hits a Snag
Firestone Diamonds stated that the sale of its Botswana
operations to Tango Mining Ltd. met with an obstacle after Tango said it was unable
to pay the deposit required by the sale agreement.
Tango had been required to pay $300,000 into an escrow
account as a deposit for the $7.7 million acquisition of Firestone’s Botswana
assets and, after failing to do so, requested an extension of the deal’s
timetable to complete its fundraising.
Firestone said it is holding talks with Tango to consider
the request and that it will provide an update once the talks are completed or
terminated.
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Botswana’s Rough Exports -15%
Exports of rough diamonds from mines in Botswana fell 15% to
$1.7 billion (Pula 18 billion) in the first half, while the country’s August
exports totaled $358.5 million, according to the Bank of Botswana.
Most of the exports came from Debswana, a joint venture
between the Botswana government and De Beers. Debswana produced 4% less year on
year in the first half, according to Reuters. The company had previously cut
its full-year production target to 20 million carats from 23 million carats.
Diamond exports contribute 30% to the country’s gross
domestic product, but diamond demand has slowed since late 2014 due to the dollar
strengthening against the Pula and liquidity problems.
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Lucapa Confirms Kimberlite at Angola Project
Lucapa Diamond Company identified the presence of confirmed
kimberlite material at its Lulo project in Angola. The miner called the
identification a “significant outcome” of its pitting and grade control
programs around the Mining Block 8 alluvial diamond field.
Lucapa also announced that pitting has successfully expanded
the mining block, which has been the source of rare, D-color, Type II gems and
fancy color diamonds weighing more than 10.8 carats.
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Diamcor’s Revenue +49%
Diamcor Mining reported a 70% increase in rough diamond
carat sales for its fiscal second quarter compared with the previous fiscal
quarter, alongside a 49% hike in revenue to $676,835.
The Canadian group, which operates a strategic alliance with
Tiffany & Co. Canada, reported that it participated in one rough diamond
tender during the period, where it sold 4,845.93 carats.
The company also reported a large increase in the volume of rough
diamonds recovered but not tendered. It now holds around 4,030.83 carats of
rough in inventory, compared to roughly 2,050 carats at the close of the previous
fiscal quarter, a 96% increase.
Diamcor attributed this rise in rough inventory to initial
increases in processing levels and subsequent recoveries, as well as its decision
to leave certain higher-value rough diamonds out of its second-quarter sale due
to recent low prices. The company said these diamonds would be offered again
through tenders it expects to hold in the coming quarter.
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GENERAL
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3D Jewelry Printing Could Be $11B Industry
Three-dimensional jewelry printing could become an $11
billion market by 2020, according to “Opportunities for 3D Printing in Precious
Metals,” a report published by SmarTech Markets that claims this technology
could have a disruptive impact on the industry, based on the predicted value of
rings, necklaces, watches and other common consumer fashion items produced
through 3D printing.
The idea is close to entering “new territory” through timepiece
components, directly fabricated jewelry and accessories made from precious
metal powder, according to the report, which cited 3D printer manufacturers
that are already involved in the industry, including 3D Systems, Solidscape
(wax models), Concept Laser, EnvisionTEC, EOS and Realizer, as well as service
bureaus Shapeways and Sculpteo, 3D software manufacturer Autodesk and Progold,
which makes gold and other alloy powders.
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DEF Awards Higher-Education Grants
The Diamond Empowerment Fund (DEF), co-founded by De Beers,
donated $122,500 to the African Leadership Academy (ALA) to help “outstanding”
young students gain access to higher education.
ALA co-founders Fred Swaniker, a former consultant at
McKinsey & Company, and Chris Bradford, who previously worked for Procter
& Gamble and Boston Consulting Group, received the DEF grant at a ceremony
in New York.
The Johannesburg-based academy offers a two-year program to
prepare pupils for college, focusing on leadership, entrepreneurship and
African studies.
Graça Machel Mandela, the widow of former South African President
Nelson Mandela, was also present at the award event and participated in a
discussion on preserving African identity, handling urgent social issues and
motivating the next generation of Africans to effect change on the continent.
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Berkshire’s Richline Joins Anti-Wildlife Trafficking Effort
Richline Group, a wholly owned subsidiary of Berkshire
Hathaway, joined forces with other jewelers to campaign against the illegal
acquisition of wildlife products by the precious stones industry.
Richline, a Tamarac, Florida-based jewelry maker and
marketer, teamed up with firms such as Ethical Metalsmiths, Wildlife Friendly
Enterprise Networks and Jewelers of America to cut the demand for and supply of
such products.
The campaign also aims
to raise awareness of the wildlife trafficking crisis and support President
Obama’s U.S. Wildlife Trafficking Alliance, which was launched in 2013.
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WDC Criticizes Amnesty CAR Report
The World Diamond Council (WDC) has become the latest body
to come out against a recent Amnesty International report that claimed diamond
trafficking was being used to fund violence in the Central African Republic
(CAR).
In an interview with Bloomberg, WDC president Edward Asscher
that the Kimberley Process (KP) had taken “more than 99%” of conflict diamonds
off the market.
"The diamond council gladly re-invites Amnesty to
participate and join us and the [KP’s] civil society coalition looking into
aspects of CAR and the whole Kimberley Process," he added.
The KP has banned diamonds exports from the CAR since May
2013, two months after the overthrow of President Francois Bozize, a Christian,
by mostly Muslim militias.
Amnesty legal adviser Lucy Graham told Bloomberg the organization’s
report was “a damning indictment of the Kimberley Process and its failure over
a number of years to address human rights abuses and other illegal and
unethical practices" and demanded stricter laws to require companies to
investigate their supply chains and disclose what preventative measures they
have taken.
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PDE Picks Khemlani as New President
The Panama Diamond Exchange (PDE) elected Mahesh Khemlani as
its next president, replacing longstanding CEO Erez Akerman.
Khemlani, Panama’s former vice minister of finance, will
join the bourse from Panamanian private investment firm Grupo VerdeAzul.
The bourse also announced that Ali Pastorini, director of
marketing for the World Jewelry Hub, the trading center that opened in Panama
earlier this year, would become the PDE’s senior vice president.
Akerman, who is stepping down at the end of October, is set
to become managing director of the World Jewelry Hub. He has been president of
PDE since the bourse’s founding in 2008.
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Etsy to Offer Networking Service for Designers, Manufacturers
Etsy, a peer-to-peer e-commerce site focused on handcrafted
or vintage items, including jewelry, is set to launch Etsy Manufacturing, a
marketplace for designers and manufacturers.
The venture, which will go live this year, will enable
designers to search for and contact manufacturing partners. Etsy is already
accepting applications from manufacturers at its website. The venture is the
result of a pilot program launched by the company earlier this year that found
that in normal circumstances “finding a good partner is really, really hard.”
While it will not conduct direct audits or site visits, Etsy
said it will review and approve manufacturers’ applications on an individual
basis, based on criteria that includes a commitment to transparency, the degree
to which a company allows subcontracting and the participant’s business size.
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AWDC to Send Local Text Alerts in Emergencies
The Antwerp World Diamond Centre (AWDC) is introducing a
notification system that will inform users by text message of any security
incident that arises in the city’s diamond hub.
AWDC said the SMS alert mechanism was designed to update the
Antwerp diamond community quickly in the event of a “serious and ongoing
emergency” within the Antwerp Diamond Area and, if necessary, to provide
evacuation guidance.
The service is free of charge, though registration is
subject to review.
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ECONWATCH
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Diamond Industry Stock Report
View the detailed industry stock report.
| (13:30 GMT) |
Oct. 8 |
Oct. 1 |
Chng. |
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| $1 = Euro |
0.89 |
0.90 |
-0.007 |
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| $1 = Rupee |
65.04 |
65.52 |
-0.5 |
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| $1 = Israel Shekel |
3.85 |
3.93 |
-0.08 |
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| $1 = Rand |
13.42 |
13.85 |
-0.43 |
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| $1 = Canadian Dollar |
1.31 |
1.33 |
-0.02 |
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| Precious Metals |
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| Gold |
$1,144.83 |
$1,115.41 |
$29.42 |
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| Platinum |
$948.05 |
$903.75 |
$44.30 |
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| Silver |
$15.69 |
$14.57 |
$1.12 |
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| Stock Indexes |
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Chng. |
| BSE |
26,845.81 |
26,220.95 |
624.86 |
2.4% |
| Dow Jones |
16,902.93 |
16,284.70 |
618.23 |
3.8% |
| FTSE |
6,355.94 |
6,105.07 |
250.87 |
4.1% |
| Hang Seng |
22,354.91 |
20,846.30 |
1,508.61 |
7.2% |
| S&P 500 |
1,995.83 |
1,920.03 |
75.80 |
3.9% |
| Yahoo! Jewelry |
1,043.36 |
1,004.14 |
39.22 |
3.9% |
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INDIA MARKET REPORT
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Polished Trading Activity
Market slow and
uncertain as international buyers wait for price stability. Manufacturers’
profit under continuous pressure as De Beers fails to significantly reduce
rough prices. Manufacturing down by as much as 50 percent before November 10 Diwali
vacation. Liquidity remains tight with reports of numerous companies facing
financial difficulties. Bharat Bourse bans synthetics trading throughout
premises.
Read the Polished Diamond Trading Report
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