News

Advanced Search

Rapaport TradeWire December 27, 2013

Dec 26, 2013 6:00 PM   By Rapaport
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
  Rapaport TradeWire  
Rapaport TradeWire
RAPAPORT NEWS SERVICE | Dec. 27, 2013   www.rapaport.com | news@rapaport.com
 
 
Retail & Wholesale Mining EconWatch General Stats India
Facebook Twitter RSS
 
 
Rapaport Weekly Market Comment Dec. 27, 2013


U.S. holiday sales exceed low expectations despite consumer caution. Diamond trading centers quiet as U.S. and Belgium markets close for Christmas. Markets now focusing on Chinese New Year demand. Rough markets stable with increased manufacturing to relieve polished shortages. Liquidity challenges persist. Courts order Tiffany to pay Swatch $450M in contract dispute. Antwerp Diamond Bank sold to Yinren Group. Marange Antwerp tender sells 279,723 cts. for $10.7M ($38/ct.). Belgium’s Nov. polished exports -1% to $1.1B, rough imports -1% to $1.1B. Hong Kong 3Q polished imports +15% to $4.8B. All of us at Rapaport wish you and yours a happy, healthy, prosperous and peaceful New Year.



RapNet Data: Dec. 26
     
Diamonds   1,041,938
Value $6,730,979,303
Carats   1,158,277
Average Discount -27.71%

www.rapnet.com

RAPI Chart

Get Current Price List | Subscribe to Rapaport | Join RapNet

 
RAPAPORT ANNOUNCEMENTS
January
14-22
Tue-Wed
Rapaport
Rapaport Melee Auction

New York & Dubai
 
View details.


January
15-22
Wed-Wed
Rapaport
Rapaport  Single Stone Auction

New York & Israel

www.rapaportauctions.com


March
27-31
Thu-Mon
The Diamond Show

Markthalle Building, Basel, Switzerland

Visit - Exhibit - Learn More:
www.thediamondshow.net



  QUOTE OF THE WEEK
  You can't get a suit fitted on the Internet. You can't get a bra fitted on the Internet; you can't win a great prize, you can't be in line and have a bit of fun, and that's what it's about. We've got to recreate that theater in-store to bring customers back.

Bernie Brookes | Myer

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.


RETAIL & WHOLESALE  
 
U.S. Jewelry Sales +9%

Jewelry sales in the U.S. during November, which kicked off the Christmas shopping season, rose 9.1% year on year, according to preliminary government figures, maintaining a 12-month running total of $72.6 billion. Sales of watches increased 11.3%, representing an annual total of $9.9 billion. Meanwhile, the U.S. consumer price index (CPI) for jewelry in November was flat, while it increased 3.9% for watches.

Comparatively, department store sales in November fell 4.3% year on year to $17.47 billion. Department store sales have had a difficult year, falling 5% for the first 11 months of 2013 to $150 billion. Retail sales for all product categories in November rose 4.7% year on year to $432.3 billion. Retail trade sales increased 4.6% year on year and nonstore retail sales improved 9.4% compared with November 2012.

Analytics firm RetailNext determined that foot traffic to stores fell 2.8% year on year in November; however, conversions rose so sales improved 1%. When coupling Black Friday with Thanksgiving Day, overall traffic was up 1.3%, according to RetailNext and total sales for both days increase 5.8% compared with the same holiday weekend in 2012.



 
U.S. Jewelry CPI Flat

The U.S. consumer price index (CPI) for jewelry was basically flat, or down by just 0.5%, year on year at 176.16 points in November; however, the reading was 1.5 points lower than October a full three points lower than September's index. The highest CPI was 183.19 points in January 2012. The average monthly CPI for the first 11 months of the year was 0.3% lower year on year at 177.78 points.

The jewelry CPI reading in November marked its 34th consecutive month with a reading of more than 170 points, continuing to maintain a historically strong inflation trend. After reaching a record early in 2012, the prices of gold, platinum and diamonds have remained under pressure, contributing to a slightly lower CPI for most of this year. Gold was about 27%lower year on year in November and platinum was down by nearly 15%. The RapNet Diamond Index (RAPI), the global benchmark for polished diamond prices, dropped 4.7% year on year for 1-carat diamonds in November, the index for 0.50-carat diamonds fell 1.7% and it declined 2.9% for 3-carat stones. However, RAPI for 0.30-carat diamonds jumped 8.2% in November.



 
U.S. Seasonal Retail Sales +2%

Depending upon which measurements are used, U.S. Christmas sales forecasts remained in the range of 1% to better than 3%. But according to preliminary figures, MasterCard Advisors SpendingPulse was the most optimistic so far, claiming that key product sales rose 2.3% year on year during the November 1 through December 24 period. Jewelry sales outperformed its competing categories such as apparel and electronics, according to SpendingPulse.

However, ShopperTrak estimated that retail sales had increased 2% during the period as in-store retail sales fell 3.1% year on year for the week that ended on December 22 and foot traffic plunged 21.2%. ShopperTrak observed that despite markdowns and promotional efforts, sales slipped 0.7% on Super Saturday, which was December 21 and in-store traffic decreased 18.1%. ShopperTrak maintains that post-Christmas markdowns and sales will drive robust retail sales and store traffic in the days to come, particularly on December 26 and 28.

As for ecommerce, comScore found that retail sales rose 10% to $42.8 billion from November 1 through December 22, which was below its prediction of a 14% increase.



 
Amazon Reveals Top Jewelry Gifts

Amazon.com told investors that it completed its most successful Christmas season to date and shipped merchandise to 185 countries. The online retailer's membership program, Amazon Prime, registered 1 million new subscribers in the week leading up to Christmas, which technically qualified them for free two-day shipping on many items.

While there were a number of popular Christmas gifts, Amazon listed three jewelry items that made its best sellers list this season. The top gift was a set of sterling silver and amethyst flower earrings that retailed for about $55 from Amazon Curated Collection; a sterling silver "I Love You To The Moon and Back" two-piece pendant necklace from SilverCloseOut that was listed for $22.95 and a ''Tree of Life'' silver, expandable bracelet from jeweler Alex & Ani that sold for about $28.



 
Shree Ganesh Plans Restructuring

Shree Ganesh Jewellery House Ltd. requested debt restructuring with the State Bank of India (SBI). The process is a mechanism that permits viable companies additional time to meet debt obligations, subject to certain terms and conditions, besides providing a path to restructure debt. Shree Ganesh Jewellery went public in 2010 and it is engaged in trading, manufacturing and exporting gold and diamond jewelry.



 
Tiffany Lowers Guidance After Settlement

Tiffany & Co. was ordered to pay $449.5 million (CHF 402.7 million) to Swatch Group over their failed joint venture. Tiffany & Co. lowered its earnings guidance about 37% following the court ruling in Holland to between $2.30 and $2.35 per share. Tiffany & Co. and Swatch established a partnership in December 2007 to produce and market watches, but the deal ended in a bitter and expensive court battle. Swatch sued Tiffany in December 2011 for breach of contract, prompting Tiffany to countersue a few months later.

In addition to the arbitration penalty, Tiffany & Co. must also pay approximately $800,000 to cover two-thirds of the arbitration costs and reimburse Swatch an amount of $8.8 million for legal fees and expenses incurred by the group.



 
Bloves Receives Funding

Shanghai-based The BLOVES, a firm that customizes and sells diamond and wedding rings, announced it had received $30 million in funding from Hong Kong-based Omaha Capital China. The BLOVES stated that some of the capital will be used to build a customization center and additional funds will be used to integrate upstream resources including global diamond resources.



 
India Revisits SEZs Rules

India's department of commerce claimed that some manufacturers are using special economic zones (SEZs) to import diamonds illegally in an effort to avoid paying duty. SEZs were set up specifically for adding value to imported products for the purpose of exporting finished goods. The government is considering a ban on diamond and gem imports to SEZs, according to The Economic Times, while it introduces stringent rules on what defines added value to the final product. Officials found several firms in Surat's SEZ were trading gold, pearls and diamonds locally rather than manufacturing these items for exporting to other destinations. The duty on diamonds is 2%, gold's import duty rose this year to 11.5%.



 
Lypsa Approves Hong Kong Deal

The board of directors for Lypsa Gems & Jewellery Ltd. approved creating a subsidiary in Hong Kong, though a time frame was not provided. Lypsa Gems & Jewellery is based in Mumbai and it has affiliates in Antwerp, Dubai and Moscow. The company's manufacturing facilities are located at Navsari and at SurSez, Surat. The diamond firm specializes in rough preparation and distribution, catering to small and mid-size diamond manufacturers based in Mumbai and Gujarat.



GENERAL  
 
ALROSA Elects Board

ALROSA's shareholders voted to elect 15 supervisory board members including the following:

Fyodor Andreev, ALROSA's president and CEO; Sergey Barsukov, a director of the financial policy department for Russia's Ministry of Finance; Pavel Borodin, a vice president at VimpelCom; Ivan Demyanov, a vice president at ALROSA; Sergey Dubinin, the chairman of the supervisory council for VTB Bank; Dmitry Zakharov, the general director of RIC-Finance; Valentina Kondratyeva, Yakutia's head of state autonomous agency center for strategic research; Nadezhda Kononova, the deputy general director of Republican Investment Company; Vasily Lukyantsev, the first deputy head of administration for Lensk district municipality; Sergey Mestnikov, the first deputy minister of Yakutia's property and land relations; Denis Morozov, a representative of Russia's board of directors of the European Bank for Reconstruction and Development; Nina Osipova, a deputy finance minister in Yakutia; Oleg Fyodorov, an adviser to the head of Federal Agency for State Property Management; Alexander Shokhin, the president of the Russian Union of Industrialists and Entrepreneurs and Ilya Yuzhanov, a board member for OTKRITIE Financial Corporation.

ALROSA's shareholders also voted to approve the revised version of regulations for the remuneration of the supervisory board members. The election was also convened following the tragic deaths of former board members Victor Yefimov and Alexander Morozkin.



 
CEBR Ranks Future Economies

The Centre for Economics and Business Research (CEBR) forecasts China to overtake the U.S. as the world's largest economy in 2028 with a gross domestic product (GDP) valued at $33.5 trillion and, at the same time, India will overtake Japan to become the third largest economy with a GDP valued at $6.6 trillion. Other noteworthy predictions take place beforehand. Brazil is forecast to overtake the U.K. and Germany as the fifth largest economy in 2023 with a GDP of $3.8 trillion. The U.K. is predicted to become the fifth largest economy in 2018 with a GDP of $3.1 trillion, overtaking France, but then it will slip behind Brazil and India in 2023 and settle at No. 6 behind Germany in 2028.

By 2028, France (No. 5 in 2013) and Italy (No. 9 in 2013) drop out of the top 10 world economies, while Russia maintains its spot at No. 8, Mexico joins the top 10 at No. 9 and Canada holds its position at No. 10.



 
Rapaport Partners With Show Provider

U.S. Antique Shows partnered with the Rapaport Group for its jewelry trading platform and brokerage services to provide an efficient platform for companies to trade at the shows, granting buyers access to jewelry from around the U.S. and providing suppliers with the ability to sell jewelry to a large buyer base. The Rapaport Group will be selling a large assortment of closeout, estate and signed jewelry at The Original Miami Beach Antique Show in January. In addition, the Rapaport Group will sponsor the LA Antique Jewelry & Watch Show, the Las Vegas Antique Jewelry & Watch Show and New York Antique Jewelry & Watch Show in 2014. Rapaport Group’s partnership also includes booths at both The Original Miami Beach Antique Show and Las Vegas Antique Jewelry & Watch Show.



 
Zimbabwe Plans Second Tender in Antwerp

Zimbabwe plans a second tender of Marange diamonds at the Antwerp World Diamond Centre (AWDC) from February 12 to 19 following a $10.7 million sale of rough stones earlier in December. The tenders were made possible after the E.U. eliminated sanctions against the Zimbabwe Mining Development Corporation (ZMDC), which is still under U.S. sanctions as is diamond miner Marange Resources and Diamond Mining Company. The second tender anticipates offering rough diamond parcels from the aforementioned firms along with Anjin Investments, Jinan and Kusena Diamonds.

Available diamonds are expected to varying widely in quality and size, state of cleaning, sorting and composition. Zimbabwe's treasury designates a 15% royalty on the sale of diamonds that originate from its mines. In his 2014 national budget, Zimbabwe's Finance and Economic Development minister, Patrick Chinamasa, said that President Robert Mugabe directed the treasury and the Ministry of Mines to reform the industry to ensure greater transparency, according to the Zimbabwe Independent newspaper. The president ordered a tripartite control overseeing diamonds, including the ministries of state finance, mining development and the Minerals Marketing Corporation of Zimbabwe (MMCZ), which is also on the U.S. sanctions list.



MINING  
 
Diavik Meets Compliance Specs

Diavik Diamond Mines Inc. successfully obtained the International Organization for Standardization (ISO) and Occupational Health and Safety Advisory Services (OHSAS) recertifications for its health, safety, environment, and quality systems. Det Norske Veritas Certification Inc. (DNV), a Norwegian classification society, conducted external audits before awarding certification at the mine's site outside of Yellowknife. The recertification process entailed a comprehensive evaluation of Diavik’s strategic business systems, procedures and a compliance assessment. ISO recertification is conducted every three years after two annual surveillance audits.



 
NDTC Declares Dividend

The Namibia Diamond Trading Company (NDTC) declared a dividend of $7.72 million (NAD 80 million), the second of the year following a payout of $3.9 million earlier. NDTC's joint shareholders include the government and De Beers. The company estimated that 2013 revenue was likely to have increased 26% year on year to $1.06 billion.



 
Lucara's Resource Estimate Grows

Lucara Diamond Corporation updated its resource estimate for the Karowe diamond mine in Botswana, resulting in a greater than $1 billion increase in the estimated in-situ value of the indicated mineral resource. The update was completed by Mineral Services Canada Inc. and took into account the mine's production of high-value stones since production started in April 2012. The updated mineral resource was based on the large amount of new information generated since the start of production at Karowe.

The presence of exceptional stones within the center and south lobes is now reflected in the size frequency distributions and the modeled average price. In 2013, Lucara sold more than 438,000 carats of diamonds for gross proceeds in excess of $180 million. Included in these were 23 diamonds that each sold for over $1 million, including nine diamonds which sold for more than $3 million each.




STATS  
 
Belgium

  Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,140 -1% $12,847 5%
Polished imports $1,004 -3% $12,424 2%
Net exports $136 12% $423 416%
         
Rough imports $1,086 -1% $12,138 7%
Rough exports $1,289 12% $13,308 10%
Net imports ($203)   ($1,170)  
         
Net diamond account $339 448% $1,593 80%


 
Hong Kong

  3Q $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $4,783 15% $13,667 13%
Polished exports $3,091 15% $8,894 2%
Net imports $1,692 15% $4,773 24%
         
Rough imports $469 48% $1,425 19%
Rough exports $641 55% $2,023 47%
Net imports $172   ($181)  
         
Net diamond account $1,520 11% $2,855 -22%


ECONWATCH  
 
Diamond Industry Stock Report

U.S. retailers were mainly higher now that Christmas season is over and sales appear to have improved by low single-digits. Indian firms mixed with Gitanjali (+33%) and Rajesh (-11%) defining the spread. Mining shares were mainly even except for Lucara (+16%) and Gemfields (-5%). View the extended stock report.


  Dec. 26 Dec. 19 Chng.  
$1 = Euro 0.730 0.732 -0.002  
$1 = Rupee 61.90 62.17 -0.3  
$1 = Israel Shekel 3.49 3.51 -0.02  
$1 = Rand 10.36 10.41 -0.05  
$1 = Canadian Dollar 1.06 1.07 -0.01  
         
Precious Metals        
Gold $1,211.10 $1,189.10 $22.00  
Platinum $1,354.00 $1,316.00 $38.00  
         
Stock Indexes       Chng.
BSE 21,074.59 20,708.62 365.97 1.8%
Dow Jones 16,479.88 16,179.08 300.80 1.9%
FTSE 6,694.17 6,584.70 109.47 1.7%
Hang Seng 23,179.55 22,888.75 290.80 1.3%
S&P 500 1,842.02 1,809.60 32.42 1.8%
Yahoo! Jewelry 946.89 938.84 8.05 0.9%




INDIA MARKET REPORT  
 
Polished and Rough Trading Activity

Polished trading has slowed considerably as overseas markets close for Christmas, but good demand for -2 sieve and dossiers. Improved demand for rough but liquidity remains extremely tight. Read the full report.  




Advertisements

Rio Tinto Select

GIA Lab Reports



Single Stone and Melee


Advertisements
Swim Jewelry Software

Rapaport Magazine

Art of Jewellery



Diamond Show Basel

Advertisements
 
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Similar Articles
Similar Videos
Important Security Tips From Jewelers Security Alliance
Sep 09, 2013
As the U.S. retail and wholesale trades enter the final...
certification The Rapaport Certification... jewelry sales Jewelry Store Sales... retail sales Online Retail Sales...
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2014 by Martin Rapaport. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are TradeMarks of Martin Rapaport.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.