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Rapaport TradeWire January 21, 2016
Jan 21, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
January 21, 2016
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Polished prices firm due
to shortages. Rough demand improving as manufacturers try to fill gaps in
supply amid unconfirmed reports that De Beers has cut prices 5-7% at Jan.
sight. Demand is cautious due to weak global economy and plunging stock markets:
Dow -10% (Jan. 1-20), oil slumps below $30. Low expectations for Lunar New Year
as China’s 2015 GDP growth slows to 6.9%. Christmas retail season softer than first
reported as Tiffany Nov.-Dec. sales -6% to $961M. India Dec. polished exports
-17% to $1.2B, rough imports +2% to $1.5B. Rio Tinto 4Q production +50% to 4.3M
cts., Simon Trott replaces Jean-Marc Lieberherr as diamond chief.
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| Diamonds |
1,065,756 |
| Value |
$7,943,642,792 |
| Carats |
1,222,034 |
| Average Discount |
-27.82% |
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
After such a difficult year, it seems that there are some reasons to be cautiously optimistic as 2016 begins, and we may be starting to recover some of the lost momentum.
De Beers CEO Philippe Mellier in a speech at the sight in Gaborone this week
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MARKETS
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United States: Mood improving and
dealers are looking for select goods. Liquidity is tight. Suppliers giving
higher discounts for cash deals, while buyers are insisting on credit terms...
Belgium: Dealers gaining in
confidence as polished prices firm. Shortages supporting prices with no substantial
rise in demand ahead of Chinese New Year. U.S. demand stable...
Hong Kong: Dealers filling
last-minute orders before the market shuts down for the Chinese New Year Spring
Festival (Feb. 8)...
India: Greater optimism about
the market as prices firm due to shortages. Trading improved since Diwali.
Suppliers still concerned about China as Chinese New Year demand is very soft...
Israel: Rising dealer confidence.
Polished prices firming due to limited availability of fine-cut goods and some
U.S. post-holiday and Chinese New Year demand...
Click here to continue reading
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INDUSTRY
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Rapaport Releases Annual Price Statistics Report 2015
The Rapaport Group released its annual Diamond Price
Statistics Report for 2015, evaluating the performance of polished diamond prices.
The report provides an in-depth analysis of the trends in polished diamond
prices during the past year and it compares the price changes of specific
diamond categories.
The Rapaport Diamond Price Statistics Report charts the progression of polished
diamond prices and indexes in various sizes throughout the year and across a
period of up to 37 years. In doing so, the report provides a complete study of
the history and current standing of the global diamond market.
To purchase the report, please visit: http://store.rapaport.com/
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India’s Polished Exports -17% in December
India’s polished diamond exports slumped 17% year
on year to $1.2 billion in December, according to provisional data from the Gem
& Jewellery Export Promotion Council. By volume, polished exports dropped 5%
to 1.9 million carats. Polished imports plummeted 46% to $239 million, leaving
net exports 4.6% lower at $964.3 million.
Rough diamond imports increased 2.4% to $1.47
billion and rough exports fell 7.3% to $99.6 million, leaving net imports 3.2%
higher at $1.37 billion. India’s net diamond account, which is calculated as
the difference between net polished exports and net rough imports, was negative
$402.2 million, compared with negative $313.4 million in December 2014.
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Leo Schachter Hires Sales VP
Polished diamond manufacturer
Leo Schachter Diamonds has appointed Frederick Goldman’s senior vice president
Joseph Green as its new executive VP of sales.
In his new role, Green is responsible for the development of the De Beers sightholder’s business supplying diamonds to independent retailers.
Green was senior vice-president at jewelry maker
Frederick Goldman for eight years. He
was also a VP at Ritani, a jewelry designer and manufacturer.
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Borsa Istanbul, WDM Sign Pact
Turkish exchange Borsa Istanbul signed an
agreement with the World Diamond Mark Foundation (WDM) to “institutionalize”
diamond trading in Turkey and other markets with which the bourse is connected.
The deal “cements the cooperation” between the
diversified Istanbul bourse and the WDM, the WDM said.
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RETAIL & WHOLESALE
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Tiffany’s Holiday Sales -6%
Tiffany & Co. reported
global sales in the two months to December 31 dropped 6% year on year to $961
million as a stronger U.S. dollar coupled with weaker tourist spending hit
revenue. The jeweler cut its guidance for full-year net earnings.
Even at constant exchange rate, worldwide sales
fell 3% during the 2015 holiday season as declines in the Americas and Asia
Pacific offset growth in Japan and Europe. Comparable-store sales worldwide
slid 5% ex-currency.
In the U.S., lower foreign-tourist spending in
New York and certain other markets in the country exacerbated the sales drop.
Total sales slumped 7% year on year to $505 million. Ex-currency, the dip was 5%
and comparable-store sales fell 8%.
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U.S. Jewelry Store Sales Rise in November
U.S. specialty jewelry store
sales rose 3.6% year on year to $2.6 billion in November, according to
provisional figures from the U.S. Census Bureau.
Sales in the first 11
months of 2015 fell 1% year on year to $24.69 billion.
Total retail and food services
sales in the U.S. increased 1.6% to $448.58 billion in November, adjusted for
seasonal fluctuations.
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U.S. Holiday Sales +3%
U.S. holiday sales rose 3%
year on year to $626.1 billion despite unforeseen weather conditions and an
“extreme deflationary retail environment,” according to the National Retail
Federation (NRF). This total growth in retail revenue, which includes online
sales, lags the NRF’s 3.7-percent increase forecast for the season.
Non-store holiday sales grew 9% to $105 billion. Retail sales in December – excluding
automobiles, gas stations and restaurants – increased 3.1% on an unadjusted
basis.
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U.S. Jewelry Prices Fall in December
The U.S. consumer price index
(CPI) for jewelry fell 0.4% in December from a month ago, according to the
Bureau of Labor Statistics. The inflation reading was 1% lower from a year
earlier.
The December CPI for watches slipped 1.6% from a
month ago and rose 0.8% from a year earlier, according to the U.S. labor data.
The CPI for all urban consumers declined 0.1% in December on a seasonally
adjusted basis.
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MINING
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Rio Tinto’s 4Q Production +50%
Rio Tinto reported diamond
production surged 50% year on year to 4.3 million carats in the fourth quarter
that ended December 31.
The Argyle pit in the remote
East Kimberley region of Western Australia produced 3.4 million carats in the
three months, an 86-percent jump from a year ago. Production at the miner’s
Diavik mine in Canada slipped 3% to 899,000 carats.
Rio Tinto’s full-year
production for 2015 grew 25% to 17.4 million carats, below its guidance of 18 million carats issued on October 16. Total diamond production in 2016 is
forecast at 21 million carats, a 21-percent increase on 2015.
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Rockwell Diamonds’ 3Q Revenue -63%
Rockwell Diamonds reported
revenue decreased 63% year on year to $4.9 million (CAD 7.1 million) in the
third quarter that ended November 30 as diamond prices around the world dropped
and a fatality at the Remhoogte plant in South Africa caused a two-week
shutdown at the mine.
The loss for the quarter nearly doubled to $6.4
million compared with the same period last year. Rough diamond sales declined
60% to $4.8 million, while beneficiation income – revenue from a deal with
polished-diamond manufacturer Diacore – slumped 89% to $106,606. The average
price per carat sold increased 16% to $1,328.
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Diavik Production -3% in 2015
Recovery levels from the Diavik
Diamond Mine in Canada fell 3% year on year to 1.5 million carats in the fourth
quarter that ended December 31, part-owner Dominion Diamond Corporation
reported. A 9-percent drop in processing volumes to 0.46% contributed to the
decline in extraction.
Full-year recovery in 2015 fell 9% to 6.4
million carats, which was below the planned 7 million carats, Dominion said. Results
released by Dominion, which owns 40% of Diavik, are on a 100-percent basis. Rio
Tinto controls the remaining interest in the mine.
The companies plan to produce 7 million carats
at the mine in 2016, a 9% increase over the output in 2015. Together, they plan
to mine 2.1 million tonnes and process the same amount this year, according to
a preliminary plan.
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Rio Tinto’s Diamond Head to Depart
Jean-Marc Lieberherr, the
managing director of Rio Tinto’s diamonds business, is to leave the company as
part of a restructuring of the miner's diamonds and minerals product group.
Lieberherr, who has held the position for two and a half years, will be replaced by Simon Trott, Rio Tinto said. Lieberherr had been with the company for ten years. Trott is currently managing director
of Rio Tinto’s salt and uranium businesses and will retain these
responsibilities.
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Lucapa’s Lulo Sales Hit Quarterly Record
Lucapa Diamond Company
reported revenues of $5.6 million (AUD 8.1 million) from three sales of
diamonds from the Lulo Diamond Project in Angola in the fourth quarter that
ended December 31.
The figure was the highest quarterly sales
result achieved by the miner to date, the company said. The average selling price was $1,468
per carat, the highest since mining commenced in January 2015.
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GENERAL
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Rolex Exec. Elected JSA Chair
The board of the Jewelers’
Security Alliance (JSA) elected Rolex Watch U.S.A.’s chief executive officer
Stewart Wicht as its chairperson for a three-year term.
Wicht’s election was announced at a JSA annual
luncheon in New York on January 9. He
replaces Adam Heyman, who also served three years.
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WJA Chooses International Board
The Women's Jewelry
Association (WJA) elected Brandee Dallow, director of Rio Tinto Diamonds’ North
America representative office, as president of the WJA’s international board of
directors. Jenny Luker of Platinum Guild International will take on the president-elect
role. Dallow succeeds Andrea Hansen of LuxeIntelligence, who served for two
years in the position.
Two men have been elected to
the WJA board for the first time in the organization’s history: Craig Danforth
of the Gemological Institute of America as international affairs co-chair and
Benjamin Smithee of The Smithee Group, education chair.
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Three Convictions in Hatton Garden Heist
Three members of a gang were convicted in connection with a $20 million
(GBP 14 million) heist in London’s Hatton Garden diamond district, The
Guardian reported January 14.
Carl Wood of Cheshunt, Hertfordshire; William Lincoln of Bethnal Green, east
London; and Hugh Doyle, of Enfield, north London, were found guilty by a court
in London January 14, the U.K. daily said.
A group of men drilled through a 50 centimeter-thick concrete wall to break
into the Hatton Garden Safe Deposit vault over the Easter weekend in 2015, the
report said. Some $12.8 million of the loot has not been recovered yet. A key
gang member nicknamed “Basil,” captured on camera with a wig of red hair, is
still at large.
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ECONWATCH
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Diamond Industry Stock Report
Industry stocks suffered this past week as
global markets tumbled. U.S. retail declines were led by Birks Group (-22%), while
Tiffany fell 7.3% on disappointing holiday sales. Chow Sang Sang (-6.1%) headed
the Far East drops. Mining stocks were mixed, with declines led by Rockwell
(-16%) on poor 3Q results. Lypsa Gems (+27.5%) led the drops in India.
View the detailed industry stock report.
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Jan. 21 (11:45 GMT) |
Jan. 14 (11:45 GMT) |
Chng. |
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| $1 = Euro |
0.92 |
0.91 |
0.002 |
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| $1 = Rupee |
67.99 |
67.49 |
0.5 |
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| $1 = Israel Shekel |
3.97 |
3.94 |
0.03 |
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| $1 = Rand |
16.69 |
16.62 |
0.07 |
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| $1 = Canadian Dollar |
1.45 |
1.44 |
0.01 |
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| Precious Metals |
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Chng. |
| Gold |
$1,099.25 |
$1,092.25 |
$7.00 |
0.6% |
| Platinum |
$818.26 |
$844.88 |
-$26.62 |
-3.2% |
| Silver |
$14.03 |
$14.09 |
-$0.06 |
-0.4% |
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| Stock Indexes |
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Chng. |
| BSE |
23,962.21 |
24,772.97 |
-810.76 |
-3.3% |
| Dow Jones |
15,766.74 |
16,151.41 |
-384.67 |
-2.4% |
| FTSE |
5,697.07 |
5,842.17 |
-145.10 |
-2.5% |
| Hang Seng |
18,542.15 |
19,817.41 |
-1,275.26 |
-6.4% |
| S&P 500 |
1,859.33 |
1,890.28 |
-30.95 |
-1.6% |
| Yahoo! Jewelry |
969.60 |
981.65 |
-12.05 |
-1.2% |
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INDIA MARKET REPORT
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Polished Trading Activity
Greater optimism about
the market as prices firm due to shortages. Trading improved since Diwali.
Suppliers still concerned about China as Chinese New Year demand is very soft. Weak
emerging markets weighing on sentiment with rupee sinking below INR 68/$ to
near record lows. Weak currency reducing domestic demand, but helping exports. Rough
improving during sight week as manufacturers are slightly increasing polished
production to fill shortages.
Read the Polished Diamond Trading Report
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