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Rapaport TradeWire March 9, 2017
Mar 9, 2017 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
March 9, 2017
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Dealers optimistic about short-term demand following
improved trading at the Hong Kong show. Buyers did better than sellers as suppliers
were willing to compromise on price in order to generate liquidity and reduce
inventory before new better-quality polished production becomes available. Chinese
demand changing and competing with U.S. market for lower-price-point SI-I1
goods, leaving IF-VVS weak. Signet Jewelers 2016 sales -2% to $6.4B, profit +16%
to $543M. Belgium Feb. polished exports -15% to $1.4B, rough imports -32% to
$908M. GIA discovers large parcel of undisclosed CVD synthetics mixed with
natural melee at Mumbai lab. Russia confirms Sergey Ivanov as new ALROSA CEO. |
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| Diamonds |
1,228,325 |
| Value |
$7,504,133,823 |
| Carats |
1,318,582 |
| Average Discount |
-30.34% |
www.rapnet.com
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| The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network. |
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
When people say, ‘I'm not going to buy diamonds because it has a bad rap,’ think of the two-plus million people in Botswana who are going to be affected by their decision.
William Lamb, CEO of Lucara Diamond Corporation, in an interview with Bloomberg.
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MARKETS
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United
States: Polished trading stable with positive momentum from
the Hong Kong show. Steady demand for 1 ct., G-J, VS-SI diamonds…
Belgium: Positive sentiment as trading improved at the Hong
Kong show. Dealers optimistic about short-term rise in polished trading
after slow start to the year…
Israel:
Dealers more optimistic after Hong Kong show. Good
Indian demand for I-K colors…
India: Polished market stable as dealers returned from positive
Hong Kong show. Dealers optimistic about the U.S. and hopeful the Chinese
market is starting to improve…
Hong
Kong: Positive mood as dealers focus on follow-up after
the show. Good dealer demand for loose diamonds which were more liquid than
finished jewelry at the show…
Click here for deeper analysis |
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INSIGHTS
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5 Lessons from the Hong Kong Show
The Hong Kong show was better than expected for the diamond trade, as Chinese jewelers were looking for goods after being absent from the market for some time. But while exhibitors were simply happy to be doing business again, conditions ultimately favored buyers...
Click here to continue reading
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INDUSTRY
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GIA Finds Significant Undisclosed Synthetics
The Gemological Institute of America (GIA) recently
uncovered an unusually large number of undisclosed synthetic diamonds mixed in
with natural melee diamonds, the lab confirmed. A parcel of 323 melee diamonds
with an average size of 0.014 to 0.015 carats was found to contain 101 chemical
vapor deposition (CVD) synthetic stones at the GIA’s Mumbai lab. The goods had
been submitted to the GIA’s Melee Analysis Service, which made the discovery.
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Court Upholds Leviev Win Against Julius Klein
A New York federal judge upheld an arbitration ruling in
favor of diamond magnate Lev Leviev (pictured) in a long-running
dispute with the Julius Klein Group. The judge ordered Julius Klein and four of its principals to pay $142 million to LGC USA Holdings, an
affiliate of the Leviev Group of Companies, according to Leviev’s firm. This is
in addition to more than $66 million that has already been paid – amounting to
a total award of $209 million.
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India Braces for Ban on Large Cash Deals
India’s ban on high-value cash transactions could damage
rural gold demand or spur growth in the black market, the World Gold Council
(WGC) warned. From April 1, the government will cap cash purchases at $4,493
(INR 300,000) as it continues its attempts to transform the nation’s economy
into one based more on electronic transactions. Consumers in rural
India do not necessarily have access to checks and electronic payments, the WGC
pointed out.
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Belgium’s Polished Exports Decline
Belgium’s diamond-trade statistics for February made for
somber reading, as data from the Antwerp World Diamond Centre (AWDC) showed a
slowdown in both polished and rough shipments. Polished exports slid 15% year on year to $1.35 billion. The average price of exports fell 2% to
$2,551 per carat. Rough imports fell 32% to $908.2 million, while
rough exports declined 15% to $1.09 billion.
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RETAIL & WHOLESALE
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Signet Jewelers Cautious for 2017 as Sales Decline
Signet Jewelers' sales fell 5% to $2.27 billion
during the fourth quarter, as the retailer continues to adapt to a challenging retail
environment and weak mall traffic. The company expects same-store sales to
decline by low-to-mid-single digits in the coming year as it adjusts to
competitive pricing in the jewelry sector and changing consumer behavior.
Same-store sales declined 4.5% in the fourth quarter, which ended January 28.
Net income grew 9% to $297.5 million due to reduced expenses and lower taxes.
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Michael Hill Okays Phil Taylor as CEO
Australia-based jeweler Michael Hill has appointed Phil
Taylor as its chief executive officer, the company announced on Monday.
Taylor (pictured) had been interim CEO since August of last
year, following the exit of longstanding company head Mike Parsell. Michael
Hill’s board has been impressed by the new perspectives and decisive action
evident since Taylor was appointed acting CEO, company chair Emma Hill said.
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Charles & Colvard, Helzberg Expand Retail Deal
Charles & Colvard will double the number of Helzberg
Diamonds stores where its moissanite jewelry is available, under an extension
of its arrangement with the Warren Buffett-owned retailer. The moissanite provider began supplying products to Helzberg’s ecommerce site in 2013 and later
expanded the partnership to some of the jeweler’s retail stores. |
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MINING
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Ivanov Confirmed as ALROSA Chief
Russia’s government has appointed Sergey Ivanov as president
of ALROSA for a three-year term, according to an official statement. Ivanov is
the son of a former Kremlin-administration head and currently serves as senior
vice president of Sberbank, having previously headed insurer SOGAZ. He will
replace Andrey Zharkov, who has been ALROSA’s president since 2015 and is set
to leave just over a year before his contract’s May 2018 end date. |
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Resource Estimate Drops for Argyle Mine
Rio Tinto has lowered its estimate of the mineral resources
available at its Argyle diamond mine in Australia, as the company reconsiders
its plans to extend the project. Estimated mineral resources fell 66% to
15 million tonnes in 2016, compared with the previous year, the miner said.
Mineral resources are the quantity of material in a mine that has reasonable
prospects for being extracted economically. |
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All Parcels Sell at Gahcho Kué Tender
Mountain Province sold 277,646 carats of rough diamonds at
its second tender of production from the recently launched Gahcho Kué mine in
Canada. The company sold all the parcels of diamonds on offer, including those
it had held over from its January sale due to India’s liquidity crisis. While
that previous sale of 49,420 carats fetched $6.3 million at an average price of
$127 per carat, the miner did not disclose the dollar value of its second
tender.
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Lucapa’s Lulo Rough Sale Fetches $7M
Lucapa Diamond Company sold $6.9 million (AUD 9.1 million)
worth of rough diamonds at a recent tender of goods from its Lulo mine in
Angola. The parcel of 1,552 carats went for an average of $4,446 per carat. The
sale featured a 227-carat, D-color, type-IIa diamond recovered last month at
Lulo, but the company said it would not disclose the selling price for commercial
reasons. The sale brings total proceeds from Lulo rough diamonds to $10.7
million since the start of 2017.
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GENERAL
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Dehres Targets North American Market
High-end diamond and jewelry supplier Dehres has opened an
office in Canada as it eyes expansion in the North American market. Sandy Ray,
Dehres’s managing director for Canada, launched the base in Vancouver last
week, in collaboration with local diamantaire Melvin Moss. Complementing the
firm’s existing offices in Hong Kong and Shanghai, the new outpost will mainly
target upmarket Canadian and U.S.-based retailers and wholesalers, the company
said.
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Diamond Club West Coast Picks President
Moshe Salem has been elected president of Diamond Club West
Coast (DCWC), according to the World Federation of Diamond Bourses
(WFDB). Mervyn Hahn and Kalpesh Jhaveri were voted in as vice
presidents, and Rahul Parikh took on the role of treasurer. The position of secretary went to Aaron Spicker, while Doron Auslander, Tony Ayvazian, Eli Fish, Vatche
Shirikjian and Vipul Udani were selected as directors. DCWC is an affiliate of
the WFDB. |
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ALROSA to Unveil Synthetics Detector
ALROSA will launch its synthetic-diamond detector in May at
the Mediterranean Gemmological and Jewellery Conference in Syracuse, Italy. The
portable machine screens loose polished diamonds and jewelry, identifying
synthetics as well as treated stones or simulants. Three gemologists will
test the machine with 50 samples of natural, treated and synthetic diamonds on
May 11 and 12.
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ECONWATCH
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Diamond Industry Stock Report
Mining stocks fell this week, led by Anglo American (-13%), as metal prices dropped. U.S. retail stocks were mainly down, largely tracking the Dow Jones. Luk Fuk (+4.8%) headed otherwise mixed Far East stocks, while European luxury shares mostly increased, led by Swatch Group (+1.6%).
View the detailed industry stock report
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INDIA MARKET REPORT
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Polished Trading Activity
Polished market stable as dealers returned from positive
Hong Kong show. Dealers optimistic about the U.S. and hopeful the Chinese
market is starting to improve. Good demand for GIA dossiers, especially SIs. A
lot of imperfect goods (milky or black-spotted) on the market. Steady rough
demand as major manufacturers raise production levels.
Read the Polished Diamond Trading Report |
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