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Rapaport TradeWire March 23, 2017
Mar 23, 2017 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
March 23, 2017
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Polished market upbeat with steady orders from U.S.
and Chinese jewelers. Improving demand for big stones as Basel show begins with
fewer companies attending due to high exhibitor costs. Sotheby’s to offer Oval,
59.60 ct., Fancy Vivid Pink, IF Pink Star diamond at Apr. 4 Hong Kong auction with
low estimate of $60M ($1M/ct.). Rapaport Auctions sells 83,000 cts. for $12.5M at
Hong Kong show as melee prices rebound. 1Q Rapaport Melee Index +13%. Tiffany
2016 sales -3% to $4B, profit -4% to $446M. De Beers buys LVMH stake in De
Beers Diamond Jewellers. Dominion rejects $1.1B takeover bid from Washington Companies.
India Feb. polished exports +3% to $2.4B, rough imports -3% to $1.5B.
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| Diamonds |
1,244,958 |
| Value |
$7,454,575,039 |
| Carats |
1,327,166 |
| Average Discount |
-30.36% |
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
Millennials are going to be our number-one customer in the next five years. They don’t want to go to stores to buy things. I don’t say the shop model is not there, but you need to integrate stores and online sales.
Praveenshankar Pandya, chairman of the Gem & Jewellery Export Promotion Council (GJEPC).
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MARKETS
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United
States: Sentiment improving with dealers filling orders. A
lot of goods out on memo. Stable demand for commercial-quality 1 to 2 ct., G-I,
VS2-SI2 diamonds…
Belgium: Positive market momentum with good Far East demand
for dossiers and steady U.S. demand for 1 ct., D-H, VS-SI, RapSpec A3+ diamonds…
Israel:
Polished trading relatively slow compared with other
centers. Dossiers stable but 1 to 2.99 ct., D-J, VVS-VS sluggish with tight profit
margins…
India: Good mood in the market. Firm prices for smaller
diamonds signal diminishing negative impact of demonetization on local trading…
Hong
Kong: Polished market slowed slightly after the peak
selling period surrounding the March show. Steady demand for 0.50 to 0.70 ct.,
D-H, VVS-SI RapSpec A2+ (3X, none) diamonds…
Click here for deeper analysis |
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RAPAPORT STATEMENT
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Rapaport Garners $12.5M at Hong Kong Auctions
Rapaport Auctions, the world’s
leading recycler of diamonds, closed its Hong Kong auctions this month at one
of the largest jewelry shows of the year. The auctions sold over 83,000 carats of
polished diamonds for $12.5M, achieving a sell-through rate of over 87%. The Rapaport Melee Index (RMI™) for
small diamonds increased by 13.3% to 108.40 during the first quarter of 2017.
Click here for the full story |
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INSIGHTS
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Will Retail Help De Beers ‘Build Forever’?
De Beers acquisition of LVMH’s 50% stake in De Beers Diamond
Jewellers was hardly surprising, as it means the company has taken full control
of its branding. What it does next with the network of stores will be more telling
for the company and its Forevermark program...
Click here to continue reading
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INDUSTRY
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Rapaport to India: Scrap Diamond Import Tax
Martin Rapaport, chairman of the
Rapaport Group, called on India to show reciprocity in its trade relationship
with the U.S. by lowering or removing its import tax on diamonds, gems and jewelry.
Speaking at
the “Mines to Market” conference in Mumbai to mark 50 years of India's Gem & Jewellery Export Promotion Council, Rapaport noted that India’s import tax on loose
polished diamonds and gems was 2.575%, whereas the U.S. charged nothing. Further, he said, India’s levy on diamond-jewelry imports is 31.56%, compared with
America’s 5.5%.
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Modi Notes Custom Jewelry Potential
Indian Prime Minister Narendra Modi urged
his country’s gem and jewelry industry to forge stronger connections with
consumers in order to shape their buying habits and grow the sector. In
particular, it should tap into demand for custom jewelry by utilizing the
“golden opportunity” of ecommerce technology, he told the “Mines to
Market” conference in Mumbai. The trade should support young
entrepreneurs in order to cultivate such a market, he added.
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India’s Polished Exports Improve in Feb.
India’s polished exports rose 3% to
$2.41 billion in February, according to data from the Gem & Jewellery
Export Promotion Council (GJEPC). Polished imports dropped 20% to $178 million, and net polished exports –
the excess of exports over imports – increased 6% to $2.24 billion. Meanwhile,
rough imports declined 3% to $1.51 billion, and rough exports grew 11% to $145
million. The country's net diamond account grew 25% to $875 million.
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China’s Polished Imports Rise in 2016
China’s polished diamond imports
increased 4.9% to $7.02 billion last year, according to data from the China
Customs Information Center. By weight, polished imports increased 1.2% to 7.7
million carats, while the average price rose 3.7% to $916 per carat. Polished exports fell 11%
to $1.91 billion, meaning net polished imports jumped 12% to $5.12 billion. Rough imports slid 13% to $666 million, while rough exports increased 11% to
$30 million. |
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RETAIL & WHOLESALE
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De Beers Buys Out LVMH Retail Partner
De Beers has taken full ownership of
the De Beers Diamond Jewellers (DBDJ) retail operation. The group bought the 50% stake owned by LVMH, which previously
operated the stores, for an undisclosed sum, thereby ending its partnership with
the luxury house. DBDJ comprises 32 stores in 17 consumer markets around
the world, including China, London, Paris and New York. |
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Pink Star Diamond Back on the Auction Block
Sotheby’s will auction the Pink Star
diamond in Hong Kong next month, more than three years after its previous sale
fell through. The oval,
59.60-carat, internally flawless, fancy vivid pink diamond is expected to
exceed $60 million, which would rank it among the most valuable diamonds ever
sold, according to Sotheby’s. It will be on display at the Hong Kong Convention
and Exhibition Centre from March 29 to April 3 before going under the hammer on
April 4.
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Tiffany Targets New Products as Sales Fall
Tiffany & Co. expects to turn a
corner in 2017 by raising the number of new product launches following last
year’s poor performance. Sales fell 3% to $4
billion in the fiscal year that ended January 31, with net earnings declining
4% to $446.1 million. Tiffany
continues to emphasize its fashion product segment and is also seeing increased
success with sales under $500, said Michael
Kowalski, Tiffany’s chairman and interim CEO.
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Swiss Watch Dip Expected to Solidify Market
The Swiss watch industry remained
cautious at the start of the Baselworld show as data indicated a continued
slowdown in the timepiece trade. The nation’s watch exports declined 10% to $1.5
billion (CHF 1.49 billion) in February, the Federation of the Swiss Watch Industry reported. However, the downturn will lead to a
consolidation period that will benefit the entire sector, said Eric Bertrand,
president of the Baselworld Exhibitors’ Committee. Baselworld runs from March 23 to 30.
Image: Newscast |
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MINING
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Dominion Under Merger Spotlight
Dominion Diamond Corporation received a $1.1 billion takeover
approach from the Washington Companies. The miner said it was prepared to enter discussions with the group,
but claimed the informal proposal was “opportunistic” and undervalued the
business. Dominion has also been in merger talks with Stornoway Diamond Corporation, with discussions covering the possibility of Stornoway CEO Matt Manson filling the soon-to-be vacant CEO role at Dominion, Reuters reported. |
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ALROSA Upbeat Despite Sales Decline
ALROSA sales fell 6% to an
estimated $1.25 billion during the first quarter even as its rough diamond prices
firmed, the company reported. The miner’s rough diamond price index rose 2%, with reports of strong demand at the beginning of the year. Although
sales slowed during the quarter, the company maintained a positive outlook for
the rest of 2017, with full-year production projected to rise 5% to 39.2
million carats.
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Pastor Finds 706ct. Diamond in Sierra Leone
An alluvial miner
discovered a 706-carat rough diamond at the Koyadu village in Sierra Leone, the
government confirmed. The stone was presented to the country’s President Ernest
Bai Koroma by Paramount Chief Paul Saquee of the Tankoro chiefdom in the Kono
district, where artisanal miner Pastor Emmanuel A. Momoh unearthed it. Koroma thanked the chief and
his people for not smuggling the diamond out of the country and stressed the
importance of selling it in Sierra Leone. |
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GENERAL
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DPA Taps Bartle Bogle Hegarty for India Ads
The Diamond Producers Association
(DPA) has appointed Bartle Bogle Hegarty as its creative agency in India. The organization plans to roll out the “Real Is Rare” campaign in the
sub-continent in September, reported DPA chief executive officer Jean-Marc
Lieberherr (pictured). The launch will be
the DPA’s first venture outside the U.S. The association is also seeking to
raise its budget for 2017, which will be funded by its seven member mining
companies, predominantly De Beers and ALROSA.
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Shenzhen Bourse to Embrace Polished Diamonds
The Shenzhen Rough Diamond Exchange (SRDE) plans to expand into
polished trading and is preparing to rebrand as the Shenzhen Diamond Exchange
to reflect the upgrade. The SRDE opened a bonded warehouse in 2015, where rough
diamonds and colored gemstones that have been shipped into the Chinese city can
be held tax-free for traders to view. The exchange now plans to receive
polished diamonds, which will then be sent to the Shanghai Diamond Exchange as
per import procedures.
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TAGS to Hold Six Dubai Rough Tenders
Trans Atlantic Gem Sales (TAGS) will host six rough
diamond tenders at the Dubai Diamond Exchange this year. The collaboration aims to enable suppliers with smaller
production to present their goods alongside larger offerings and gain greater
exposure. Buyers, meanwhile, will be able to maximize the value of their
viewing time, since they’ll have access to a wider range of goods, explained Mike Aggett, general manager of TAGS (pictured). |
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ECONWATCH
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Diamond Industry Stock Report
Dominion Diamond (+44%) and Stornoway Diamond (+12%) both gained significant value following reports the pair were in merger talks, with Dominion also boosted by a separate $1.1 billion takeover bid from Washington Companies. In the U.S., J.C.Penney (-7.8%) and Macy's (-6.4%) led the declines amid continued concerns over the future of brick-and-mortar retail. Tiffany & Co. (+5.7%) rose on better-than-expected results.
View the detailed industry stock report
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Mar 23, 2017 (11:58 GMT) |
Mar 16, 2017 (12:45 GMT) |
Chng. |
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| $1 = Euro |
0.93 |
0.93 |
0.00 |
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| $1 = Rupee |
65.47 |
65.39 |
0.08 |
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| $1 = Israel Shekel |
3.64 |
3.63 |
0.01 |
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| $1 = Rand |
12.51 |
12.73 |
-0.22 |
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| $1 = Canadian Dollar |
1.33 |
1.33 |
0.00 |
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| Precious Metals |
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Chng. |
| Gold |
$1,248.10 |
$1,231.59 |
$16.51 |
1.3% |
| Platinum |
$964.00 |
$965.40 |
-$1.40 |
-0.1% |
| Silver |
$17.60 |
$17.45 |
$0.15 |
0.9% |
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| Stock Indexes |
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Chng. |
| BSE |
29,332.16 |
29,585.85 |
-253.69 |
-0.9% |
| Dow Jones |
20,661.30 |
20,950.10 |
-288.80 |
-1.4% |
| FTSE |
7,325.46 |
7,405.93 |
-80.47 |
-1.1% |
| Hang Seng |
24,327.70 |
24,288.28 |
39.42 |
0.2% |
| S&P 500 |
2,348.45 |
2,385.26 |
-36.81 |
-1.5% |
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INDIA MARKET REPORT
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Polished Trading Activity
Good mood in the market. Firm prices for smaller
diamonds signal diminishing negative impact of demonetization on local trading.
Steady demand for E-I, VS-SI dossiers, especially in 0.40 cts. Large
manufacturers near full production and able to turn over new inventory. Rough
trading stable with smaller De Beers sight expected next week.
Read the Polished Diamond Trading Report |
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