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Rapaport TradeWire April 7, 2016
Apr 7, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
April 7, 2016
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Diamond
markets quiet after positive first quarter. March 1 ct. RAPI unchanged, 1Q up +1.4%.
Selective buyers offering lower prices as inventories rise and new supply
becomes available. High-quality 3 ct.+ demand very weak. Rough trading steady during
De Beers sight with reports of a 2-3% price increase. ALROSA cuts 2015
production target to 37-39M cts. Lukoil’s 2015 Grib Diamonds revenue reaches
$162M. Sotheby’s HK sells $73M (66% by lot) with De Beers oval, 10.10 ct., fancy
vivid blue, IF diamond selling for $31.8M ($3.2M/ct.). Belgium’s March polished
exports -6% to $1.2B, rough imports -30% to $979M. Jacques Korn elected
president of Antwerp Diamond Bourse.
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| Diamonds |
1,158,944 |
| Value |
$8,033,788,292 |
| Carats |
1,279,171 |
| Average Discount |
-28.28% |
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
The Oppenheimer Blue can only be described as one of the rarest gems in the world. It is the gem of gems.
François Curiel, chairman of Christie’s Asia Pacific and China, on the 14.62-carat diamond due to be auctioned in Geneva in May for an estimated $38 million to $45 million.
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MARKETS
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United
States:
Polished trading stable.
Ovals in short supply and easier to sell as rounds inventory increases. Good
demand for 0.30 to 1.99 ct., G-J, VS2-I1 diamonds. High-quality big-stone
demand very weak...
Belgium: Activity quieter and
sentiment weaker in April. Rising concern about sluggish European consumer
demand and synthetic diamonds. Steady demand for 0.30 to 1 ct., G-I, VS-SI
diamonds...
Israel: Polished trading slowed
since March Hong Kong show with sluggish big-stone demand. Steady demand for
0.30 to 0.99 ct., D-H, VS-SI, RapSpec A2 diamonds. Steady fancy shape demand
for ovals, pears and emeralds...
India:
Market is relatively
quiet with slow domestic demand as the jewelers strike continues. Jewelers
unhappy with government proposed compromise on 1% excise duty...
Hong
Kong: Sentiment improving and
dealers expect 2016 to be better than last year. Polished trading picked up
since Easter break with stable demand for dossiers and 1 ct., D-J, VS-SI
RapSpec A2 diamonds...
Click here for deeper analysis
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RAPAPORT COMMENT
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Synthetic Diamond Scam
Martin Rapaport takes on the issue of synthetic diamonds in
his “Synthetic Diamond Scam” article and in an open letter he calls out
Leonardo DiCaprio for falsely claiming that his synthetic diamonds are more
ethical than legitimate natural diamonds from artisanal diggers. Rapaport
pleads with DiCaprio to use his fame and fortune to support fair trade diamond jewelry which can significantly improve the lives of millions of the poorest
people on earth.
Click here for the article | Click here for the open letter
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INDUSTRY
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Polished Diamond Prices Stable in March
Polished diamond prices were stable in March supported by
steady dealer trading even though the outlook for consumer demand remains
uncertain. In the first quarter, sentiment improved as polished prices rose and
profitability increased on select new production.
The RapNet Diamond Index for 1-carat, GIA-graded diamonds was flat in March.
RAPI for 0.30-carat diamonds fell 0.6% and RAPI for 0.50-carat diamonds was
unchanged. RAPI for 3-carat diamonds slipped 0.4%.
In the first quarter, RAPI for 1-carat diamonds rose 1.4%, extending the
uptrend from the fourth quarter. However, the index fell 4.6% below its level
last year.
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DPA's Marketing Campaign to Debut in June
The Diamond Producers Association (DPA) will introduce its
marketing campaign at the JCK Las Vegas jewelry show in June, it said this
week.
“The DPA will be presenting its campaign to the trade for the first time in Las
Vegas at JCK,” said Sally Morrison, the DPA’s managing director of marketing.
The promotions drive will come just over a year after the DPA was formed in May
2015 by seven leading diamond miners.
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Belgium’s Diamond Trade Slides in March
Belgium’s polished diamond exports fell 5.9% year on
year to $1.16 billion in March, according to the Antwerp World Diamond Centre.
By volume, polished exports slid 8.1% to 489,611 carats, while the
average price climbed 2.4% to $2,372 per carat.
Among Belgium’s main trading partners, polished exports to Hong Kong plummeted
53% but shipments to Switzerland increased 8.5%. Exports to the
U.S. rose 9.6%.
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RBI Relaxes Credit Terms on Diamond Imports
The Reserve Bank of India has allowed authorized
dealer banks to extend the period for which “clean credit” can be provided for
rough and polished diamond imports, the Gem and Jewellery Export Promotion
Council (GJEPC) reported.
Clean credit refers to a loan provided by a foreign supplier to its Indian
customer for importing diamonds without formal guarantees such as a letter of
credit or undertaking by an Indian financial institution, the GJEPC explained.
Under the new rules, credit can be given for more than 180 days from the date
of shipment, whereas previously there was a 180-day restriction on the
timeline.
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Korn Elected Antwerp Diamond Bourse President
The Antwerp Diamond Bourse has appointed Jacques Korn, a
40-year industry veteran, as president and Rajender Gahani as executive
director.
Korn, who was previously the bourse’s executive director, also sits on the
board of the Antwerp World Diamond Centre (AWDC). Both Korn and Gahani will
serve a four-year term.
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RETAIL & WHOLESALE
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De Beers Blue Diamond Fetches $32M
Sotheby’s sold the ‘De Beers Millennium Jewel 4’ for $31.8
million (HKD 248.3 million) in Hong Kong, setting a record for the highest
price ever paid for a jewel at an auction in Asia.
The oval-shaped, 10.10-carat, fancy vivid blue, internally flawless gem fetched
$3.2 million per carat. In total, the auctioneer’s Magnificent Jewels and
Jadeite auction on April 5 sold $73.3 million of jewels, or 65.7% by lot and
69.3% by value.
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Christie’s to Auction Record-Breaking Blue Diamond
The largest fancy vivid-blue diamond
ever to be put up for auction is set to go under the hammer at Christie's, marking the latest in a string of large colored
diamonds coming up for sale.
The 14.62-carat ‘Oppenheimer Blue’ will lead
Christie’s Magnificent Jewels auction in Geneva on May 18, with an estimated
value of $38 million to $45 million. The stone is named after its previous
owner Sir Philip Oppenheimer, who was the chairman of De Beers Diamond Trading
Company from 1975 until his death in 1995.
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DGSE Sales Decline 14% in 2015
Sales at DGSE Companies dived 14% in 2015 because of weakness in its jewelry and scrap businesses, according to the pawnbroker.
Revenue dropped to $60.9 million in 2015 from $70.7 million the previous year.
The company, which buys and sells jewelry, diamonds, fine watches, coins and
precious metals, recorded a loss from continuing operations of $2.3 million,
compared with a loss of $635,693 in 2014.
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MINING
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ALROSA Cuts Production Target for 2016
ALROSA lowered its guidance for production of rough diamonds
in 2016 in a bid to reduce accumulated inventory from
last year.
In a meeting on April 1, the company cut its target for production to between
37 million and 39 million carats, from 39 million carats. The
revision will be achieved by implementing an employee-leave schedule, implying
a reduction in output won’t impact jobs or productivity, management explained.
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Lukoil’s Diamond Sales Hit $162M in 2015
Lukoil’s revenue from diamond sales hit $162 million (RUB 11
billion) in 2015 as the company increased output at its Grib mine. Sales in the
prior year stood at $15 million given that production started in September
2014.
The majority of Lukoil’s diamond output is sold via its Antwerp-based Grib
Diamonds subsidiary. About 20% of the goods are sold independently in Russia.
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First Kimberlite Sales from Lace Mine in 85 Years
DiamondCorp recorded a sale of kimberlite diamonds from its
Lace mine in South Africa for the first time since 1931, achieving an average
price of $175 per carat.
The mining and exploration company sold 6,247 carats of kimberlite diamonds of
more than 1.25 millimeters in diameter for $1.1 million. The company sold a
further 2,401 carats of fine diamonds and stones from tailings for $46,000, or
$19 per carat, giving a total of 8,648 carats of all sizes of rough diamonds.
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Gemfields Emerald Auction Fetches $33M
Gemfields raised $33.1 million after fetching record average
prices at its emerald auction in Lusaka, Zambia, from March 30 to April 3.
The company sold 469,000 carats of the 558,000 carats of emeralds on
offer at an average price of $70.68 per carat, a record at the company’s
auctions. Of the 18 lots presented, 16 were sold.
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Stornoway Raises Production Guidance for Renard Mine
Stornoway Diamonds reported that its Renard project will
likely yield 25% more diamonds than projected and operate for four more years
than expected as the mine prepares for commercial production by year-end.
An updated plan revealed a surge in the Canadian mine's probable
mineral reserve from 17.9 million to 22.3 million carats, extending its
operating life from 11 to 14 years.
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Kennady Diamonds Hires Dedicated CEO
Kennady Diamonds has appointed Rory Moore as its president and
chief executive officer, effective May 1. Moore is a former CEO of Mineral Services Group of Companies and Canabrava Diamond Corp.
Moore replaces Patrick Evans, who has led the diamond
exploration company since its incorporation in 2012 and remains president and CEO of Kennady Diamonds’ parent company,
Mountain Province Diamonds. The appointment comes as Kennady Diamonds’ exploration project in Canada has advanced to the stage that it
requires a dedicated CEO, the company said.
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GENERAL
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JBT Appoints Former HSBC Credit Specialist as President
The Jewelers Board of Trade
(JBT) said it appointed Anthony Capuano as its new president.
Capuano is a former vice-president and senior relationship manager
at HSBC Bank, where has was responsible for the bank’s New York diamond and jewelry portfolio. He
previously held similar positions at Scotia Mocatta, part of Scotiabank, and
Bank of America. He replaces
Dione Kenyon, who will retire later this spring after helping with the
leadership transition.
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Cecilia Gardner to Step Down as JVC Chief
The Jewelers Vigilance Committee (JVC) said its longstanding
chief executive officer and president, Cecilia Gardner, will step
down at the beginning of 2017.
Gardner’s exit will follow JVC’s planned celebration for completing 100 years.
Discussions are ongoing with the executive committee over the scope of
Gardner’s continued role at JVC, a company she has led since being promoted
from general counsel in 2005.
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Israel Bourse to Hold Rough Diamond Week
The Israel Diamond Exchange (IDE) is seeking to expand the
third International Rough Diamond Week in May, the organizers said.
“After the success of the first two events, we are now
seeking to expand this into a truly international rough marketplace. This will
in turn enable us to offer a larger and more varied rough supply to both local
and foreign buyers,” said Yoram Dvash, president of the IDE.
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Ex-Cartier Chairman Joins Upstart Jewelry Brand
Ralph Destino, a former chairman of Cartier and the
Gemological Institute of America (GIA), has joined jewelry upstart CADAR to
guide the company’s entry into the industry.
Destino, who has joined CADAR
as a director, will particularly focus on developing the company’s
relationships with retail jewelers across the U.S.
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ECONWATCH
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Diamond Industry Stock Report
U.S. and European retail stocks suffered this past week, led by Movado Group (-8%) on disappointing guidance. Indian stocks were mixed, with rises led by Lypsa Gems (+7.3%). Stellar Diamonds (-13%) and Firestone Diamonds (-11%) headed the declines among miners, while most other mining stocks were steady or slightly increased.
View the detailed industry stock report.
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Apr. 7 (10:47 GMT) |
Mar. 31 (08:00 GMT) |
Chng. |
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| $1 = Euro |
0.88 |
0.88 |
0.00 |
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| $1 = Rupee |
66.56 |
66.24 |
0.3 |
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| $1 = Israel Shekel |
3.78 |
3.78 |
0.01 |
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| $1 = Rand |
15.20 |
14.89 |
0.31 |
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| $1 = Canadian Dollar |
1.31 |
1.30 |
0.01 |
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| Precious Metals |
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Chng. |
| Gold |
$1,236.41 |
$1,229.55 |
$6.86 |
0.6% |
| Platinum |
$954.50 |
$965.58 |
-$11.08 |
-1.1% |
| Silver |
$15.18 |
$15.25 |
-$0.07 |
-0.5% |
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| Stock Indexes |
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Chng. |
| BSE |
24,685.42 |
25,379.41 |
-693.99 |
-2.7% |
| Dow Jones |
17,716.05 |
17,716.66 |
-0.61 |
0.0% |
| FTSE |
6,162.13 |
6,159.62 |
2.51 |
0.0% |
| Hang Seng |
20,266.05 |
20,706.39 |
-440.34 |
-2.1% |
| S&P 500 |
2,066.66 |
2,063.95 |
2.71 |
0.1% |
| Yahoo! Jewelry |
1,087.12 |
1,077.29 |
9.83 |
0.9% |
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INDIA MARKET REPORT
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Polished Trading Activity
Trading slowed after
dealers reported good sales in March. Buyers pushing for higher discounts as
polished inventory grows. Manufacturing stable after estimated increase of 20% in
first quarter.Steady U.S. and Far East demand for 1 ct., G-J, VS-SI qualities.
Domestic Indian demand quiet as jewelers continue strike against 1% excise
duty. Strike momentum fading ahead of popular gold buying Gudi Padwa festival (April
8). Rough trading steady during De Beers sight week.
Read the Polished Diamond Trading Report
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