|
|
Rapaport TradeWire April 25, 2014
Apr 24, 2014 6:00 PM
By Rapaport
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rapaport Weekly Market Comment
Apr. 25, 2014
|
|
Diamond trading very quiet during Passover and Easter holidays. Far East demand slow ahead of May 1 retail season. U.S. market stable. Good demand for GIA-dossiers with shortages due to grading delays. Liquidity problems developing in India as banks tighten credit conditions. De Beers 1Q production +18% to 7.5M cts. Petra Diamonds 3Q revenue +55% to $164M, production +15% to 743,424 cts. Lazare Kaplan 3Q revenue -6% to $14M. RapNet Melee Index (RMI) +5.4% to 137.6 in 1Q. GIA appoints Matt Crimmin VP of laboratory operations.
|
|
| RapNet Data: Apr. 24 |
| |
|
|
| Diamonds |
|
1,003,330 |
| Value |
$6,394,010,240 |
| Carats |
|
1,110,593 |
| Average Discount |
-26.72% |
www.rapnet.com
| |
 |
|
|
|
|
Get Current Price List | Subscribe to Rapaport | Join RapNet |
|
|
|
QUOTE OF THE WEEK
There was increased inter-dealer trading and market liquidity in the first quarter as dealers sought to source diamonds while prices continued to rise. Prices have stabilized over the last few weeks and we anticipate the market to remain steady going into the second quarter.
Ezi Rapaport | Rapaport Group Trading
|
|
|
|
Careers@Rapaport
|
|
|
|
|
| |
The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.
|
|
|
|
INDUSTRY
|
|
|
|
|
| |
RMI +2% in 1Q14
The Rapaport Melee Index (RMI™) for small diamonds increased by 5.4% to 137.60 during the first quarter of 2014, and rose 1.9% year on year in March. In addition, Rapaport Diamond Auctions sold over 125,000 carats of diamonds for $27.4 million during the first quarter. The diamond market had a positive first quarter as polished prices firmed throughout the period.
Polished demand was spurred by jewelers restocking after Christmas and Chinese New Year holidays. The March Hong Kong show demonstrated firm Far East demand with Chinese and Indian buyers back in the market. Trading activity is expected to stabilize in the second quarter now that wholesale and retail jewelers have replenished their inventories and may restrain their buying at current higher price points. Nevertheless, sentiment remains positive after a relatively strong first quarter.
|
| |
De Beers Production +18%
De Beers production rose 18% year on year to 7.532 million carats in the first quarter, an increase that was largely attributed to easy comparisons given the impact of plant maintenance at the Orapa mine in Botswana and the ongoing recovery of a slope failure at the Jwaneng mine one year ago. This quarter, production at Orapa increased 54% year on year to 3.204 million carats, while production at Jwaneng rose 4% to 2.376 million carats.
Mining across South Africa was slowed by heavy rainfall, resulting in lower results, with Venetia's production down 17% to 531,000 carats and the Kimberley mine down 28% to 159,000 carats. Production at the Voorspoed mine rose 72% to 242,000 carats. Namdeb's production rose 1% to 432,000 carats and De Beers Canada production from the Snap Lake and Victor mines rose 3% to 409,000 carats. De Beers maintained guidance for the year at production levels between 30 million and 32 million carats.
|
| |
ALROSA's Production +6%
ALROSA’s diamond production rose 6% year on year to 7.9 million carats in the first quarter that ended on March 31. The company noted that increased output stemmed from mining higher-grade ore at the Jubilee mine and expanded production at its Aikhal, International and Arkhangelskaya mines. Revenue from rough diamond sales rose 24% to $1.5 billion. The company sold 12.7 million carats, including 9.5 million carats of gem-quality diamonds at an average price of $155 per carat and 3.2 million carats of industrial diamonds with an average price of $12 per carat. Overall, rough prices rose 4% since the beginning of the year.
|
|
|
|
RETAIL & WHOLESALE
|
|
|
|
|
| |
Wealthy Hold Jewelry Spending Steady
The American Affluence Research Center's (AARC) survey of wealthy U.S. household spending expectations for 2014 suggested a very minimal decrease for the jewelry and watches category. The survey focused on 11.4 million households, representing the wealthiest 10%. To varying degrees, slight declines were also indicated for spending expectations on non-designer and designer apparel and cameras and photographic equipment.
AARC expected slight increases in spending for domestic vacation travel, home furniture/furnishings, major home appliances and home computer equipment, based upon index readings.
Of those who purchased jewelry or watches in the past 12 months, the survey found that 3% plan to spend more in the coming year, while 56% expect to spend about the same and 42% plan to spend less on this category. The AARC's propriety rating system resulted in an index reading of 61 points for the jewelry and watch category, which was down two points from the fall 2013 survey, one point lower than a year ago and the lowest index reading since the fall of 2010.
The demographic results revealed that the jewelry spending index was highest (at 69 points) for the age group under 50, while it was 61 points for those in the 50 to 59 age group and at 58 points for those over 60 years old. Surprisingly, the jewelry and watch index by gender was its lowest for all product categories with a score of only 53 points for women and 66 points for men. The jewelry spending index scored its best results for households with a net worth of $1.5 million to $5.9 million at 69 points and its lowest score fell into households in the $800,000 to $1.49 million range at 56 points.
|
| |
Sotheby's to Narrow Loss
Sotheby’s reported that preliminary net auction sales rose 40% year on year to $730 million for the first quarter that ended on March 31. The improvement was primarily due to a $113 million, or a 34% increase in sales of impressionist and contemporary art. Nonetheless, Sotheby’s expects to report a pre-tax loss of $6 million for the period, compared with a pre-tax loss of $32 million one year earlier. Due to the seasonal nature of the art auction market, Sotheby's first quarters have historically represented a small proportion of annual sales, resulting in a net loss for the period. The company will report official results on May 7.
|
| |
Simply Diamonds Acquires M.A. Reich
Simply Diamonds, a division of Jay Gems in New York, acquired color stone and diamond jewelry manufacturer and wholesaler M.A. Reich & Co. The terms of the deal were not disclosed. M.A. Reich is one of the oldest manufacturers of colored stones and men's fine jewelry dating back to its founding in 1919. Vinnie Davis and Bill Reich have stayed on with the company, which will be based out of 590 Fifth Avenue, New York City and will have a satellite office in Buffalo, New York. Simply Diamonds own the brands "Steal Her Heart"™ and "Heartbeat™".
|
| |
Zale Plans Shareholder Meeting
Zale Corporation set a date for a special meeting of its shareholders to consider and vote on the proposed acquisition by longtime rival Signet Jewelers Ltd. The special meeting will be held on May 29 at 8 a.m. at Zale's principal executive offices, 901 West Walnut Hill Lane, Irving, Texas 75038. Zale's shareholders of record as of the close of business on April 30 will be entitled to notice of, and to vote at, the special meeting. The proposed acquisition is subject to approval by Zale’s stockholders and certain other customary closing conditions.
|
| |
Hit a Home Run for the Millennial Wallet
De Beers marked a long winning streak for the jewelry industry when "Diamonds Are Forever" convinced post-WWII consumers in the U.S. to celebrate an engagement milestone with a diamond. And while this tagline worked very well for years to come, signs that the millennial generation don't buy into it presents an opportunity for jewelers to change the conversation, according to Unity Marketing.
"Millennials just aren't buying the traditional jewelry marketing paradigm that worked for previous generations. They need messages that are relevant to their lifestyles and a generation that is delaying, even foregoing, marriage in growing numbers doesn't necessarily care about researching the 4Cs or spending three month's salary on a chunk of pressurized charcoal," said Pam Danziger, the president of Unity Marketing.
Speak the language of the future -- jewelers today must know what type of jewelry looks great with a tattoo and they must convince millennial shoppers that a $700 piece of jewelry will bring as much pleasure as the latest tech toy. Fine jewelry need not be confined to hushed studios, hidden price tags and complicated information for it must become a fun and engaging experience, or the millennial consumer will walk right past the jewelry store and on to the next tech device, Danziger concluded.
|
| |
Fairtrade Gold Opens New Scheme
The Fairtrade Foundation launched a new scheme for small jewelers, goldsmiths, silversmiths and artists in the U.K. to use ethically sourced Fairtrade gold and silver in their jewelry. A new Goldsmiths Registration Scheme represents the single most significant development in ethical sourcing since the launch of Fairtrade gold in 2011. Goldsmiths are being encouraged to register and help Fairtrade transform the lives of marginalized artisanal and small scale miners.
The Fairtrade system enables small jewelers to purchase certified Fairtrade gold and precious metals from a master licensee in a semi-finished form, such as sheet, wire, tube casting grain and use it in their work. Those who join the scheme agree to abide by certain terms and conditions that include, not being able to stamp your jewelry with the Fairtrade stamp, only using certain predetermined marketing materials and agreeing to the annual limits.
|
| |
USPTO Assigns 'Le Vian Exotics'
The U.S. Patent & Trademark Office (USPTO) issued the trademark "Le Vian Exotics" to Le Vian Corporation of Great Neck, New York on April 15 with the registration number 4514707.
Le Vian first used "Le Vian Exotics" in commerce in March 2012 and it filed for the trademark on September 18, 2013. "Le Vian Exotics" refers to bangles, bracelets, cufflinks, diamond jewelry, earrings, gemstone jewelry, necklaces, pendants, pins, rings and watches.
|
|
|
|
GENERAL
|
|
|
|
|
| |
DGSE Appoints New CEO
DGSE Companies Inc. appointed James D. "Dusty" Clem as chairman, president and CEO. Clem immediately replaced James Vierling, who resigned as CEO and director of the Dallas-based precious metal and jewelry wholesaler and retailer to accept a position with Elemetal LLC, DGSE's largest shareholder. Clem has served as the company's chief operating officer (COO) since December 2012. He was also vice president of sales and marketing from 2008 to 2012. The company also named its chief financial officer (CFO), Brett Burford, to the board of directors to take over Vierling's spot on the board.
In other news, DGSE completed the planned closure of all Southern Bullion locations this week. DGSE will continue to operate 12 retail locations, including nine Dallas Gold & Silver Exchange locations in Texas, one Bullion Express location in Illinois and two Charleston Gold & Diamond Exchange locations in South Carolina along with Fairchild International, the company’s wholesale watch division.
|
| |
GIA Promotes Crimmin
The Gemological Institute of America (GIA) appointed Matt Crimmin as its vice president of laboratory operations. He will report to Tom Moses, GIA's executive vice president and chief laboratory and research officer, and be responsible for overseeing regional laboratory operations with a focus on Africa and the Middle East.
Crimmin helped lead operational aspects of GIA’s international lab expansion from 2006 to 2009 and has valuable experience with global management and strategic initiatives to the role. He joined GIA from multi-national consumer goods company Procter & Gamble and served as GIA’s director of laboratory strategic initiatives from 2010 to 2011.
|
| |
Scio Introduces Lease Program
Scio Diamond Technology Corporation created a lease-a-diamond reactor program that essentially allows clients to guaranteed lab-created diamond supplies at regular intervals. Scio stated that it is prepared to offer up to a 5% discount over normal production costs, depending on the number of reactors leased and duration. Earlier this month, Scio announced its new 4" diamond growth technology, which claims to produce type IIa, single crystal CVD diamonds and will increase the production platform for the company's product line.
|
|
|
|
MINING
|
|
|
|
|
| |
Petra's Revenue +55%
Petra Diamonds reported that revenue rose 55% year on year to $163.9 million during the third quarter that ended on March 31 as production rose and rough prices firmed. The company sold 905,781 carats, representing a year-on-year increase of 36%. Seven special stones sold for over $1 million, achieving a total of $39.9 million. These included the 29.60-carat blue diamond from the Cullinan mine, which fetched $25.6 million.
Group production rose 15% to 743,424 carats due to an increased contribution from the company's Finsch mine. The rise in production came despite higher than average rainfall in South Africa, which impacted ore treatment at the Finsch, Cullinan and Williamson mines. Petra noted that rough prices have risen about 10% since the first of the year.
|
| |
Mwana's Production Doubles
Mwana Africa reported that diamond production at its Klipspringer slimes retreatment project in South Africa more than doubled to 12,383 carats during the fourth quarter that ended on March 31. The project achieved an average price of $21 per carat during the period.
The company treated 16,000 tonnes of fine residue tailings at an average grade of 77.4 carats per hundred tonnes from the old Marsfontein mine through the plant. Work began at the project in October 2013.
|
| |
Zimbabwe to Consolidate Marange Miners
Zimbabwe's state-run newspaper, The Herald, reported that the government may reduce the number of miners in Marange to just one or two, following a history of improper accounting for diamond operations and revenue. The winning firms would operate as joint ventures with the government.
Currently, seven operating diamond miners in the area are Anjin Investments, Diamond Mining Company, Gye Nyame, Jinan, Kusena, Marange Resources and Mbada Diamonds. The newspaper speculated that Marange Resources could survive as it is the only government-owned firm, managed through the Zimbabwe Mining Development Corporation (ZMDC). Mines and Mining Development Minister Walter Chidhakwa said he met the diamond miners and informed them that the changes were imminent. The decision is expected to be made by the middle of May.
|
|
|
|
ECONWATCH
|
|
|
|
|
| |
Diamond Industry Stock Report
U.S. shares mainly flat except for Charles & Colvard (-9%), JCP (+9%) and Sotheby's (+7%). Hong Kong lower led by Luk Fook (-5%), Europe flat except for Kering (+3%) and India mixed with Goenka (+16%) pulling ahead and Winsome (-6%) leading declines. Mining shares mostly lower led by Stellar (-8%). View the extended stock report.
| |
Apr. 24 |
Apr. 17 |
Chng. |
|
| $1 = Euro |
0.720 |
0.723 |
-0.003 |
|
| $1 = Rupee |
61.13 |
60.31 |
0.8 |
|
| $1 = Israel Shekel |
3.48 |
3.48 |
0.00 |
|
| $1 = Rand |
10.62 |
10.49 |
0.13 |
|
| $1 = Canadian Dollar |
1.10 |
1.10 |
0.00 |
|
| |
|
|
|
|
| Precious Metals |
|
|
|
|
| Gold |
$1,292.80 |
$1,295.10 |
-$2.30 |
|
| Platinum |
$1,408.00 |
$1,411.00 |
-$3.00 |
|
| |
|
|
|
|
| Stock Indexes |
|
|
|
Chng. |
| BSE |
22,876.54 |
22,628.84 |
247.70 |
1.1% |
| Dow Jones |
16,501.65 |
16,408.54 |
93.11 |
0.6% |
| FTSE |
6,703.00 |
6,625.25 |
77.75 |
1.2% |
| Hang Seng |
22,562.80 |
22,760.24 |
-197.44 |
-0.9% |
| S&P 500 |
1,878.61 |
1,864.85 |
13.76 |
0.7% |
| Yahoo! Jewelry |
1,031.28 |
1,027.83 |
3.45 |
0.3% |
|
|
|
|
INDIA MARKET REPORT
|
|
|
|
|
| |
Polished and Rough Trading Activity
Weaker demand remains in place, forcing buyers to remain cautious, while confronting tight liquidity. Read the full report.
|
|
|
Advertisements
|
|
|
Advertisements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|