|
|
Rapaport TradeWire June 8, 2012
Jun 7, 2012 6:00 PM
By Rapaport
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rapaport Weekly Market Comment
June 8, 2012
|
|
|
JCK Las Vegas show exceeds low expectations with very good U.S. demand for affordable VS-SI certs and commercial goods. U.S. taking on role as leading market with steady but price sensitive consumer demand. Expensive large stone demand weak but Triple Ex cut certs selling well to Hong Kong. Polished prices steady with RapNet Diamond Index (RAPI) for 1 ct. -0.6% in May. Rough market cautious and cutting profit margins low. Expectations for another small DTC sight of around $550M with rising concerns that sightholders may start to reject goods. BHP Billiton prices estimated -7%. Harry Winston 1Q sales +34% to $193M, profit more than doubles to $12M.
|
|
| RapNet Data: June 7 |
| |
|
|
| Diamonds |
|
919,729 |
| Value |
$6,082,623,728 |
| Carats |
|
979,382 |
| Average Discount |
-26.69% |
www.rapnet.com
|
|
 |
|
|
|
|
Get Current Price List | Subscribe to Rapaport | Join RapNet |
|
|
|
QUOTE OF THE WEEK
We are fully behind Rapaport's ethical jewelry campaign to make sure that the international jewelry community is aware of where their diamonds are coming from.
Farai Maguwu | Center for Research and Development
|
|
|
|
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, Mumbai, Dubai, and Shanghai. View jobs now.
|
|
|
|
INDUSTRY
|
|
|
|
|
| |
Polished Prices Stable in May
Certified polished diamond prices were steady during May despite a weak global trading environment. The U.S. is providing market stability while consumer demand in India and the Far East has softened and uncertainty in Europe continues to reduce confidence. Liquidity is tight and manufacturing profit margins low. Rough prices remain unsustainable and are expected to decline.
In May, the RapNet Diamond Index (RAPI) for 1 ct. diamonds fell 0.6%. The 0.3 ct. category declined by 0.3% and the 0.5 ct. stones dropped 0.4%. RAPI for 3 ct. diamonds fell 1.6% during the month. Through the first five months of the year, RAPI for 1 ct. diamonds fell 1.7% and has declined by 4.5% from one year ago.
Polished inventories are stable but trading levels are low with shortages of well-made polished goods, particularly fancy shapes and SI clarity rounds.
Indian cutters are slowly returning from summer vacation but manufacturing levels are below capacity. Polished buyers expect prices to soften due to the weak economic environment but suppliers are holding their prices firm due to expensive rough.
Rapaport will release its May 2012 Research Report on June 11 providing additional information about the state of the global diamond market. The Rapaport Research Reports can be found at www.diamonds.net/report.
|
| |
JCK Vegas Show Concludes
The JCK Las Vegas show ended on Monday with mixed reports from diamond exhibitors. Overall, the show was okay. While it did not signal a significant boom in trading, most left satisfied that the U.S. market is stable in the near term.
Square shape fancies were strong and selling at low discounts with larger discounts for princess cuts. There is a shortage of well-made fancies in the market. Rounds were weaker but prices were relatively firm. Clean makes, Triple Ex goods were in demand with best demand for SI goods, with shortage in supply.
Polished suppliers are holding prices firm due to high rough prices and there is little to no profitability on manufacturing. Indians were largely absent from this show, Israeli buyers played a strong role but trading from Belgians was weak in the polished market.
Luxury jewelry producers reported strong sales from JCK, Couture and the Antique jewelry shows.
|
| |
Rapaport Launches Ethical Pledge
Zimbabwean human rights activist Farai Maguwu urged jewelers and consumers to be vigilant to verify the source of their diamond purchases. Maguwu endorsed the Rapaport Group’s ethical pledge program launched during JCK, which was designed to encourage members of the diamond and jewelry trade to insist on written assurances in their purchases.
The pledge would ensure that sellers have investigated their sources and that the products offered are free of human rights violations, significant environmental damage, illegal activities, or sanctions by U.S. or E.U. governments.
Such sourcing would exclude Zimbabwe’s Marange fields, where the mines are part owned by Zimbabwean government agencies, which are sanctioned in the U.S. and E.U.
Maguwu noted that while the struggle to end human rights violations at Marange is being won, problems associated with Marange diamonds are far from over. He explained that the biggest challenge currently is to ensure that revenue from Marange production goes to the treasury and is used to benefit Zimbabwe's people.
Rapaport Group honored Maguwu with an award recognizing his work in advocating human rights in Zimbabwe. Martin Rapaport, the chairman of the Rapaport Group, acknowledged the extent to which Maguwu has risked his life to protect the lives, freedom and human rights of diamond diggers at Zimbabwe's Marange mines.
Sign the pledge now.
|
|
|
|
|
|
|
RETAIL & WHOLESALE
|
|
|
|
|
| |
Fundamentals Continue to Signal Growth
WATCH NOW: Varda Shine, the Diamond Trading Company's (DTC) chief executive, discusses how market conditions are shaping the second half of 2012. In this video, she shares observations from the JCK Vegas show; Indian market conditions due to the weaker rupee; China's economic impact on rough demand; global price outlook for rough diamonds, and what DTC's move to Botswana represents in terms of southern Africa's emerging economy.
|
| |
Industry's Next Gen Shines in Vegas Show Coverage
Trading activity aside, the JCK and Couture shows present an opportunity to report on how vendors are innovating design and business practices to improve their profit margins. As most of these videos show, the next generation of industry players have emerged and are taking risks and experimenting with new concepts -- whether that be in the manufacturing process or from how they sell direct to consumers. Select vendor name to watch the feature video.
-
Jewelmer shares its production story for the golden pearl and launches a new collection featuring the floral/petal motif.
-
Gebruder Schaffrath unveils its ring sizing solution with a duo-purpose diamond ring/bracelet and its Vendetta diamond collection.
-
TW Steel expands its men's and women's watch collection in the U.S.
-
Ernst Benz reveals two new collections that reflect partnership and passion behind watchmaking.
-
Kirk Kara debuts 40 new designs and wins Jeweler's Choice award for an engagement ring at JCK 2012.
-
Danhov debuts three new collections, featuring the increasingly popular petal design, and concludes this JCK show was its best to date.
-
Lafonn debuts its new line of jewelry with Rhonda Faber Green to reach an alternative level of price points.
-
Hearts On Fire details the psychology behind developing its new store concept in Las Vegas.
-
Royal Asscher debuts its pop-up store concept and reports strong consumer sales.
|
| |
Gitanjali Unveils Maya Jewels
Bollywood actors Emraan Hashmi and Kalki Koechlin unveiled the new monsoon collection of Maya Jewels by Gitanjali at its showroom at South Extension-1 in New Delhi. The actors also promoted their Hindi political thriller film ''Shanghai'' that will be released on June 8, at the launch. The latest collection is a blend of gold and diamond jewelry in various shapes that denotes the different flavors of the season, which can be worn with any attire, the company stated.
The store offers a wide assortment of jewelry from brands such as Nakshatra, Asmi, D’damas, Parineeta, Nizam and Gili.
|
| |
Using Social Media to Touch Consumers
The “2012 Social and Mobile Commerce” study, a joint research project by Shop.org, comScore, and The Partnering Group stressed the importance of social media for retailers since nearly two out of five online consumers follow retailers through social networking. The study found that social media space Pinterest has become a particularly big player in the social sharing game, with online U.S. consumers reporting that they already follow an average of 9.3 retail companies through that website compared with the average of 6.9 retailers they follow on Facebook and the 8.5 retailers they track via Twitter. Almost two out of five online consumers follow retailers through one or more social networking sites.
While Pinterest has grown into this space fairly recently, blogs, YouTube and Facebook still command the majority of consumers’ social activity. In particular, seven in 10 of those who follow a retailer’s blog click through to the website, and more than two-thirds of consumers use YouTube to browse and research a retail company.
The main reason consumers follow retailers on social media -- locate product promotions. The amount of consumers searching for these promotions, however, has dropped to 51 percent from 58 percent in the past year. Four in 10 consumers also say they look for product information on social media, while 36 percent want to post/read comments about merchandise or services.
Additionally, around three in 10 consumers who follow retailers via social media say they are actively looking for information about events, current trends and ideas, or photos and videos, such as “how-to’s” and styling ideas, as well as expert opinions.
|
| |
Blue Nile Launches in Japanese
Blue Nile launched a Japanese language version of its diamond retail website. The new website allows customers in Japan to shop Blue Nile's entire collection of diamonds and fine jewelry in their native language and pay for products using yen. Blue Nile began serving Japan in 2008, and has developed a loyal customer following over the past four years, according to the company. Shipping to Japan is free and most products arrive in approximately three days, according to Blue Nile.
|
|
|
|
MINING
|
|
|
|
|
| |
Harry Winston's Profit Jumps
Harry Winston Diamond Corporation reported first quarter sales rose 34% year on year to $192.5 million for the three months that ended on April 30. Mining segment sales jumped 44% to $89 million while luxury brand segment sales, which include retail, increased 26% to $103.5 million. Harry Winston's profit improved to $11.6 million from $3.6 million one year ago.
The company's rough diamond sales improved due to a 116% year on year increase in the quantity of stones sold. Harry Winston reported selling 1 million carats of rough during the quarter, nearly twice as much as the previous year, however, the average price per carat fell 34% in part due to the company holding back higher-priced goods and selling off lower-priced inventory.
Diavik ore production for the first calendar quarter consisted of 1.2 million carats produced from 0.39 million tonnes of ore from the A-418 kimberlite pipe, 0.2 million carats produced from 0.10 million tonnes of ore from the A-154 North kimberlite pipe, and 0.1 million carats produced from 0.04 million tonnes of ore from the A-154 South kimberlite pipe. Also included in production for the calendar quarter was an estimated 0.08 million carats from reprocessed plant rejects. Rough diamond production was 19% higher than the comparable calendar quarter of the prior year due to a combination of higher average grade and an increase in ore processed during the quarter.
|
| |
DiamondCorp Lays Out Lace Production Plan
DiamondCorp expects its Lace mine production to reach 250,000 carats by 2014, more than 400,000 carats by 2015, and then 500,000 carats by 2025. SRK Consulting recommended that mining be initiated with a block cave on level 47 of the mine. DiamondCorp's chief executive, Paul Loudon, noted that it would take 18 months to mine down to that level. The first revenue from the mine is expected before the end of the first quarter of 2014 with full production to be reached in the second quarter of 2015.
|
| |
Namakwa Recovers Rare Pink Diamond
Namakwa Diamonds recovered a rare 11.36-carat pink diamond and a 44.47-carat diamond at its North West Province alluvial mining operations in South Africa. The stones are among the top five diamonds recovered from the mining area in terms of value per carat in the rough. Namakwa noted that although the pink diamond has not been sold, it ranks alongside the 7.53-carat, vivid orange diamond discovered in October 2010 in terms of quality and rareness. As of the end of May 2012, the company reported that it produced 16,569 carats during fiscal 2012 with unit costs in line with expectations and average year to date sales prices at $764 per carat. The company expects its North West Province operations to produce 20,000 carats by the end of fiscal 2012.
|
|
|
|
ECONWATCH
|
|
|
|
|
| |
Diamond Industry Stock Report
Diamond industry stocks were mainly lower this week. The biggest drops in share price hit Kohl's (-12%), Movado (-9%), Chow Sang Sang (-7%), Theo Fennell (-18%) and Peregrine (-12%). However Stellar (+16%), Suashish (+11%), Asian Star (+9%), Scio (+11%) and LJ Intl. (+12%) recorded strong gains.
Read the extended industry stock report for this past week.
| |
June 7 |
May 31 |
Chng. |
|
| $1 = Euro |
0.794 |
0.798 |
-0.003 |
|
| $1 = Rupee |
54.90 |
55.65 |
-0.8 |
|
| $1 = Israel Shekel |
3.87 |
3.85 |
0.02 |
|
| $1 = Rand |
8.35 |
8.35 |
0.00 |
|
| $1 = Canadian Dollar |
1.03 |
1.02 |
0.01 |
|
| |
|
|
|
|
| Precious Metals |
|
|
|
|
| Gold |
$1,590.20 |
$1,559.60 |
$30.60 |
|
| Platinum |
$1,439.00 |
$1,419.00 |
$20.00 |
|
| |
|
|
|
|
| Stock Indexes |
|
|
|
Chng. |
| BSE |
16,649.05 |
16,222.30 |
426.75 |
2.6% |
| Dow Jones |
12,461.03 |
12,529.75 |
-68.72 |
-0.5% |
| FTSE |
5,447.79 |
5,350.05 |
97.74 |
1.8% |
| Hang Seng |
18,678.29 |
18,666.40 |
11.89 |
0.1% |
| S&P 500 |
1,314.99 |
1,320.68 |
-5.69 |
-0.4% |
| Yahoo! Jewelry |
907.56 |
913.67 |
-6.11 |
-0.7% |
|
|
|
|
INDIA MARKET REPORT
|
|
|
|
|
| |
Polished and Rough Trading Activity
Polished trading is very quiet and the dollar reached new highs against the rupee; furthermore, liquidity is very tight but there is ample supply of goods in the rough market.
Read the full report.
|
|
|
Advertisements
|
|
|
Advertisements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|