RAPAPORT... The Conference Board’s leading index for the United States rose 0.2 percent in October 2006, while its coincident index was also up for the month, by 0.1 percent. Six of the ten economic indicators that make up the leading index increased in October. The positive contributors were real money supply, index of consumer expectations, stock prices, average weekly manufacturing hours, manufacturers’ new orders for consumer goods and materials, and average weekly initial claims for unemployment insurance. Negative contributors to the leading index were vendor performance, building permits, manufacturers’ new orders for nondefense capital goods, and interest rate spread. The leading index now stands at 138.3 (1996=100).
The leading index increased 0.4 percent in September and decreased 0.3 percent in August. For the six-month span through October, it has decreased 0.2 percent, with half of the ten components having advanced. Housing permits continued to make the largest negative impact on the leading index in this period, followed by vendor performance, offsetting large positive contributions from real money supply and consumer expectations. Strengths and weaknesses have been roughly balanced among the leading indicators in recent months, according to The Conference Board.
Three of the four indicators that form the coincident index increased in October. They were employees on nonagricultural payrolls, industrial production, and manufacturing and trade sales. Personal income less transfer payments remained the same. The coincident index now stands at 123.7 (1996=100). This index increased 0.2 percent in September and again by 0.2 percent in August. From April to October 2006, it has risen 1.0 percent.
U.S. Polished Imports FallPolished diamond imports into the United States dipped 6.8 percent in September 2006 to $1.38 billion, while polished diamond exports eased 5.5 percent to $787 million. For the same month, rough diamond imports fell 5.3 percent to $89 million and rough diamond exports tumbled 37.5 percent to $40 million. All comparisons are with September 2005.
Israel Polished Exports Leap
Israel’s polished diamond exports and polished diamond imports surged in October 2006 by 58.5 percent and 42.4 percent to $611.2 million and $378.7 million, respectively, according to the country’s Ministry of Industry, Trade and Labor. Its rough diamond imports and rough diamond exports also climbed sharply, by 78.2 percent and 36 percent, to $544.6 million and $264.7 million, respectively.
In volume terms, Israel’s polished diamond exports soared 112.9 percent for the month to 520,922 carats and polished diamond imports increased 29.8 percent to 347,806 carats. The country’s rough diamond exports grew 66.9 percent to 1.8 million carats and rough diamond imports swelled by 97.1 percent to 2.6 million carats. The average price of Israel’s polished diamond exports dropped 25.6 percent in October to $1,173.30 per carat and the average price of rough diamond imports declined 9.6 percent to $210 per carat. All comparisons are with October 2005.
Belgium Polished Exports UpBelgium’s polished diamond exports and polished diamond imports jumped in October 2006 by 18 percent and 21.6 percent in terms of value to $807.1 million and $821.8 million, respectively. In terms of quantities, the country’s polished exports and polished imports were up 13 percent and 10.7 percent, to 819,870 carats and 886,665 carats, respectively.
For the same month, Belgium’s polished exports attracted an average price of $984.40 per carat, down 1 percent, while its polished import prices rose 9.9 percent to an average $926.80 per carat. All comparisons are with October 2005.
India Polished Exports DeclineThe value of India’s polished diamond exports fell 25 percent in October 2006 to $1.01 billion, while in the same period it imported $612 million worth of rough diamonds, which was down 13 percent. In addition, the country’s polished imports totaled $317 million and rough exports tumbled 31 percent to $40 million. All comparisons are with October 2005.
Japan Polished Imports Fall
Japan’s polished diamond imports were down 15 percent in September 2006 for a total value of $79 million, the Jewelry Trade Center Incorporated reported. India, Belgium and Israel provided the bulk — 80.8 percent — of Japan’s polished diamonds in terms of value, while polished imports from China surged 153 percent to $2.3 million.
In terms of quantity, Japan’s polished diamond imports jumped 34 percent to 239,565 carats in September, with India contributing 77 percent of the volume. Year-to-date, the average price of Japan’s polished imports has decreased 18 percent to $384 per carat. All comparisons are with the same month or period in 2005.
South Africa’s Rough Exports DropThe value of South Africa’s rough diamond exports declined 9 percent in August 2006 to $147 million and the quantity of rough exports fell 6 percent to 1.44 million carats. For the first eight months of 2006, the value and quantity of the country’s rough exports were 12 percent and 9 percent lower at $1.15 billion and 10.39 million carats, respectively.
Rough imports for August 2006 were down 7 percent to $94 million in terms of value and down 26 percent to 93,000 carats in terms of volume.
Meantime, South Africa exported 12 percent less polished diamonds in August for a total of $51 million, but the number of carats shipped for the month rose 60 percent to 30,000. Year-to-date, the value and volume of polished exports both dropped 4 percent to $429 million and 164,000 carats, respectively. All comparisons are with the corresponding month or period in 2005.
New Peak For Platinum Sales To Manufacturers
Global sales of platinum to jewelry manufacturers are expected to reach a record high of $1.98 billion in 2006, based on recent figures issued by Johnson Matthey and an average, year-to-date platinum metal price of $1,140. Taken over a five-year period, the value of platinum metal sales into the global jewelry industry has increased by 45 percent.
In terms of quantity, new platinum metal consumption is forecast to fall by 11.45 percent in 2006, in contrast to an anticipated 27 percent hike in the average platinum price for the year. However, the decline in volume has been partially compensated for by an increase in the consumption of recycled platinum, with Platinum Guild International (PGI) estimating that an additional $350 million of recycled metal was manufactured into new platinum jewelry in China and Japan.
This reflects firm demand from jewelry manufacturers and consumers’ continuing “strong” desire for the precious metal in those markets, PGI added.
Collectors’ Costs Depress ProfitCollectors Universe, Inc., the Newport Beach, California-based provider of value-added authentication and grading services to dealers and collectors of high-value collectibles, diamonds and colored gemstones, boosted overall revenues by 12 percent to $9.9 million for the first quarter of its fiscal 2007.
However, the group’s net income for the three months ended September 30, 2006, plunged 59 percent to $394,000, due to: a decline of approximately $900,000 in trade show grading revenues; an operating loss of $630,000 incurred by Collectors’ diamond operations as it continued to invest in and develop this division; and increased infrastructure-related costs stemming from the upgrading of internal systems to support expanded volume of business and entry into new markets. The decrease in trade show grading revenues was partially offset by higher grading revenues, which were up 3 percent, the company added.
PRECIOUS METALS PRICES| Date | Gold London PM | Platinum PM | Silver |
| 10/27/06 | 596.25 | 1072.00 | 12.050 |
| 10/30/06 | 608.50 | 1086.00 | 12.130 |
| 10/31/06 | 603.75 | 1073.00 | 12.080 |
| 11/1/06 | 614.10 | 1099.00 | 12.360 |
| 11/2/06 | 620.75 | 1108.00 | 12.410 |
| 11/3/06 | 622.75 | 1200.00 | 12.620 |
| 11/6/06 | 626.10 | 1177.50 | 12.510 |
| 11/7/06 | 625.75 | 1189.00 | 12.620 |
| 11/8/06 | 623.20 | 1167.00 | 12.605 |
| 11/9/06 | 625.25 | 1192.00 | 12.595 |
| 11/10/06 | 629.30 | 1220.00 | 13.025 |
| 11/13/06 | 623.50 | 1185.00 | 12.860 |
| 11/14/06 | 627.00 | 1186.00 | 12.850 |
| 11/15/06 | 617.75 | 1160.00 | 12.690 |
| 11/16/06 | 624.75 | 1196.00 | 12.940 |
| 11/17/06 | 620.50 | 1160.00 | 12.750 |
| 11/20/06 | 625.50 | 1262.00 | 12.920 |
| 11/21/06 | 624.50 | 1355.00 | 12.920 |
| 11/22/06 | 631.80 | 1140.00 | 13.070 |
| 11/23/06 | 630.25 | 1160.00 | 13.120 |
Article from the Rapaport Magazine - December 2006. To subscribe click here.