|
|
Rapaport TradeWire January 19, 2017
Jan 19, 2017 6:00 PM
By Rapaport
|
|
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
Rapaport Weekly Market Comment
January 19, 2017
|
|
|
Sentiment improving as jewelers begin stock
replenishment after mediocre holiday season. Independents outperform majors and
online takes significant market share from physical stores. China waking up for
‘Year of the Rooster’ with rising expectations for Jan. 28 Golden Week. China
doing much better than Hong Kong. Luk Fook 3Q same-store sales -10% with
China +5%, Hong Kong -11%. Rough trading steady with continued weakness in
lower-quality goods due to India demonetization problems. Price-sensitive
buyers moving to HPHT synthetics instead of lower-quality natural diamonds.
India Dec. polished exports +23% to $1.2B, rough imports -5% to $1.5B. Richline
buys The Aaron Group.
|
|
| Diamonds |
1,244,958 |
| Value |
$7,454,575,039 |
| Carats |
1,327,166 |
| Average Discount |
-30.36% |
www.rapnet.com
|
 |
| 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. |
|
|
|
|
Get Current Price List | Subscribe to Rapaport | Join RapNet |
|
| |
QUOTE OF THE WEEK
Whether it was Iceland at the Euros, Leicester City in the Premier League, the West Indies in the T20 World Cup, Sunrisers Hyderabad in the IPL, the Chicago Cubs in the World Series or the Fiji rugby sevens team in the Olympics, it was proven beyond a shadow of a doubt last year that by working together towards a common objective, you can surpass everyone’s expectations of what’s possible.
De Beers CEO Bruce Cleaver urges the industry to work together in a speech to sightholders.
|
|
|
|
MARKETS
|
|
|
|
|
| |
United
States: Polished trading improving after quiet holiday
period. New York dealers preparing for India Diamond Week in DDC (Jan. 23 to
26)…
Belgium: Steady activity with dealers gaining confidence
for 2017. U.S. demand stable, Europe weak. Stable demand for 1 ct., G-J, VS-SI,
RapSpec A3+ diamonds. 0.30 ct. to 0.40 ct. improving…
Israel:
Trading quiet. Dealers still assessing holiday
season as memo goods are slowly returned. Buyers shifting to lower price points
with steady U.S. demand for J-K, SI-I1 goods…
India: Trading improving with foreign buyers looking
for bargains in Mumbai. Shortages in select categories as fresh post-Diwali
supply still in production…
Hong
Kong: Dealer market quiet as wholesalers close for the
Chinese New Year. Some last-minute orders with steady holiday demand for 0.30
to 1 ct. E-J, VVS-SI RapSpec A2+ diamonds…
Click here for deeper analysis |
|
|
|
INDUSTRY
|
|
|
|
|
| |
Diamond Marketing Body Seeks Cash Injection
The Diamond Producers Association (DPA) plans to increase
its annual budget to $60 million from $6 million by asking members for bigger
contributions, Bloomberg reported. The industry’s marketing body is looking to
step up efforts to make diamonds appeal to younger consumers, who are
increasingly spending their cash on electronics and restaurants. The DPA
will approach members such as De Beers and ALROSA to get them to increase their
financial backing, Bloomberg said, citing people familiar with the plans who
asked not to be named.
|
| |
Demonetization Stifles India’s Diamond Imports
India’s rough diamond exports fell 5% to $1.4 billion in
December as demonetization damaged local demand, according to data published by
the Gem and Jewellery Export Promotion Council. Polished exports rose 23% to
$1.48 billion, leaving net polished exports – reflecting the excess of exports
over imports – 32% higher at $1.28 million. India’s December net diamond
account improved 89% to a deficit of $45 million as total imports exceeded
exports.
|
| |
Richline Acquires The Aaron Group
Richline Group bought jewelry manufacturer The Aaron Group,
as the Warren Buffett-owned business continues to drive growth through mergers
and acquisitions. The companies did not disclose terms of the deal, which
was the fifth acquisition Richline has made in the last 12 months. The Aaron
Group, founded in 1950, has grown from its New York roots to a manufacturer
with operations in London, Mumbai and China. The takeover will help the
company roll out new designs and collections more rapidly, according to Robert
Kempler, its president.
|
|
|
|
RETAIL & WHOLESALE
|
|
|
|
|
| |
NRF Reports Some Holiday Cheer
Holiday retail sales rose 4% driven by an accelerated
economic recovery even as certain large chain stores reported lower traffic,
according to separate reports from the National Retail Federation (NRF) and
MasterCard. The NRF said total U.S. sales increased to $658.3 billion in
November and December, with online and non-store sales growing 13% to $122.9
billion. MasterCard also estimated total sales increase at 4% during a slightly
shorter period over November 1 to December 24, with online sales jumping 19%.
|
| |
Trump Protests Disrupt Tiffany Holiday Sales
Tiffany & Co. said holiday sales declined 4% to $483
million in the Americas. The drop resulted from weaker consumer spending and post-election protests outside the
jeweler’s flagship New York outlet, which neighbors Trump Tower. Access to the Fifth Avenue store was restricted, with sales slumping 14%, contributing to overall lower U.S.
sales. Worldwide group sales increased 0.5% to $966 million amid growth in
Asia Pacific and Japan.
Image: Newscast |
| |
Forevermark Holiday Sales Outperform Rest of Trade
Forevermark diamond sales in the U.S. jumped 6.4% during the
holiday season as product launches and marketing campaigns paid off, De Beers
chief executive officer Bruce Cleaver said. Sales of the De Beers-owned brand
grew 7.6% in 2016. The figures are based on a representative survey of jewelers
that stock Forevermark products. By contrast, total jewelry sales edged up 0.7%
in December and increased 0.4% in the full year, according to data from the
Mastercard Spending Pulse cited by Cleaver.
|
| |
China a Bright Spot as Luk Fook Sales Decline
Luk Fook reported same-store sales fell 10% in the third
fiscal quarter as a continued decline in its Hong Kong business outweighed
improvements in mainland China. Same-store sales slid 11% in Hong Kong versus a
5% increase in mainland China in the three months that ended December 31. The
drop in third-quarter sales was slower than that in the previous three months,
when same-store sales slumped 37%. The figures only include retail sales
at Luk Fook’s self-operated stores.
|
| |
Birks Holiday Sales Defy U.S. Jewelry Dip
Birks Group reported comparable-store sales grew 11% in a
record holiday season for the retailer as the average spend per shopper rose
and a greater proportion of store visits translated into purchases.
Comparable-store sales jumped 16% in the U.S. and rose 3% in Canada between
October 30 and December 31, the jeweler said. All figures were reported at
constant exchange rates. The group’s stronger revenues defy an otherwise
disappointing holiday season for U.S. bricks-and-mortar jewelry retailers.
Image: Dllu
|
|
|
|
MINING
|
|
|
|
|
| |
Rio Tinto Raises Diamond Output
Rio Tinto’s rough-diamond production grew 4% to 18 million
carats in 2016, the lower end of its guidance, as it continued to step up
underground operations at its Argyle mine in Australia. Output at Argyle
increased 4% to 14 million carats. Production at the Diavik mine in Canada
rose by the same proportion, with Rio Tinto's 60% share amounting to 4 million
carats. The miner forecast production will rise to between 19 million and 24
million carats in 2017.
|
| |
Diavik Mine to Escalate Diamond Production
Dominion Diamond Corporation forecast production at the
Diavik mine in Canada will increase by up to 14% this year after output rose in
2016. The miner projected rough-diamond recovery of 7.1 million to 7.6 million
carats in 2017. Production increased 4% to 6.7 million carats in 2016, but was
below the company's forecast. |
| |
DiamondCorp Insolvency Hinges on Wage Deal
DiamondCorp warned it will likely enter insolvency
proceedings unless an agreement is reached with the mining union over
retrenchment and payment of outstanding wages. The company also announced a share sale to raise $1.2 million
(GBP 1 million) to fund the care and maintenance of its Lace mine in South Africa, after
operations were suspended because of severe flooding in November. Deloitte
& Touche, DiamondCorp's business-rescue practitioner, is in negotiations
with the Association of Mineworkers and Construction Union. |
| |
ALROSA’s Diamond Resources Decline
ALROSA’s rough diamond resources fell 4% to 1.03 billion
carats as at July 1, 2016, the Russia-based miner reported. Back on January 1,
2015, the resources stood at 1.08 billion carats. Both assessments were carried
out in accordance with a code outlined by the Joint Ore Reserves Committee (JORC),
the Australasian guidelines for reporting mineral resources and ore reserves,
according to ALROSA. Mineral reserves, defined as resources whose mining
is economically feasible, declined almost 1% to 653 million carats.
|
|
|
|
GENERAL
|
|
|
|
|
| |
Gold Set to Shine on Stronger Asian Demand
The World Gold Council (WGC) predicted gold prices will
continue to rise in 2017 as growth in Asia and political uncertainty in the
west are expected to support demand. Investment demand in China has grown,
outweighing weakness in the jewelry sector, the WGC said. In India, liquidity
squeeze resulting from the government’s demonetization policy will impact gold
demand in the short term but increased transparency and formalization of the
economy will support growth in the long run.
|
| |
Diamond Tiara Crowns Fellows Auction
U.K.-based Fellows sold $627,000 (GBP
520,000) worth of jewelry at an auction that was 74% sold by lot and 87%
sold by value. A brilliant round, 6.43-carat, K-color, VVS2-clarity diamond
ring was the most expensive item at the sale, fetching $38,986, or $6,063 per
carat. Fellows also auctioned a Victorian tiara featuring 19 to 20 carats
of J-L color diamonds with clarity ranging from SI2 to “P1,” which is
equivalent to the GIA’s I1 grade. The piece fetched $19,493.
|
|
|
|
ECONWATCH
|
|
|
|
|
| |
Diamond Industry Stock Report
Birks Group (+15%) stood out among U.S. retailers as its holiday sales outperformed the jewelry market. Tiffany (+2.8%) defied disappointing results. Industry stocks were otherwise roughly stable or lower, with Movado Group (-4%) heading the declines. In the Far East, Chow Tai Fook (+4.3%) and Luk Fook (+2.5%) gained as the latter posted improved China sales data. Indian markets showed signs of recovery, with share-price increases led by Lypsa Gems (+8.2%).
View the detailed industry stock report
| |
Jan 19, 2017 (13:05 GMT) |
Jan 12, 2017 (12:53 GMT) |
Chng. |
|
| $1 = Euro |
0.94 |
0.94 |
0.00 |
|
| $1 = Rupee |
68.13 |
67.97 |
0.16 |
|
| $1 = Israel Shekel |
3.81 |
3.82 |
-0.01 |
|
| $1 = Rand |
13.60 |
13.46 |
0.14 |
|
| $1 = Canadian Dollar |
1.33 |
1.31 |
0.02 |
|
| |
|
|
|
|
| Precious Metals |
|
|
|
Chng. |
| Gold |
$1,204.98 |
$1,204.73 |
$0.25 |
0.0% |
| Platinum |
$966.35 |
$986.80 |
-$20.45 |
-2.1% |
| Silver |
$17.02 |
$16.92 |
$0.10 |
0.6% |
| |
|
|
|
|
| Stock Indexes |
|
|
|
Chng. |
| BSE |
27,308.60 |
27,247.16 |
61.44 |
0.2% |
| Dow Jones |
19,804.72 |
19,954.28 |
-149.56 |
-0.7% |
| FTSE |
7,212.14 |
7,285.86 |
-73.72 |
-1.0% |
| Hang Seng |
23,049.96 |
22,829.02 |
220.94 |
1.0% |
| S&P 500 |
2,271.89 |
2,275.32 |
-3.43 |
-0.2% |
|
|
|
|
|
|
|
INDIA MARKET REPORT
|
|
|
|
|
| |
Polished Trading Activity
Trading
improving with foreign buyers looking for bargains in Mumbai. Shortages in
select categories as fresh post-Diwali supply still in production. Rough demand
steady as export-focused factories raise production levels. Smaller
manufacturers cautious due to liquidity squeeze.
Read the Polished Diamond Trading Report |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|