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Rapaport TradeWire March 21, 2014

Mar 20, 2014 6:00 PM   By Rapaport
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  Rapaport TradeWire  
Rapaport TradeWire
RAPAPORT NEWS SERVICE | Mar. 21, 2014   www.rapaport.com | news@rapaport.com
 
 
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Rapaport Weekly Market Comment Mar. 21, 2014


Polished markets stable with strong demand for GIA dossiers. Dealers shifting to diamond parcels, non-certs. and 0.25ct. sizes due to 0.30ct. shortages caused by GIA delays. Large stone market speculative ahead of Basel shows. Gem Diamonds 2013 revenue +5% to $213M, profit of $38M vs. loss of $77M a year ago. Belgium’s Feb. polished exports +33% to $1.6B, rough imports +18% to $1.4B. India’s Feb. polished exports +16% to $2.2B, rough imports +12% to $1.5B. Panama Gem & Jewelry Center launched. De Beers to select 5 new sightholders: D. Navinchandra Gems, Diambel, J.B. And Brothers, Star Rays, Vallabhbhai Dhanjibhai & Co. The Diamond Show to open March 27 at Markthalle in Basel.


RapNet Data: Mar. 20
     
Diamonds   1,042,355
Value $6,993,957,260
Carats   1,147,795
Average Discount -26.41%

www.rapnet.com

RAPI Chart

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RAPAPORT ANNOUNCEMENTS
March
27-31
Thu-Mon
The Diamond Show

Markthalle Building, Basel, Switzerland

Learn More:
www.thediamondshow.net


April
1-9
Tue-Wed
Rapaport
Rapaport Melee Auction

New York & Dubai
 
View Details.


April
2-10
Wed-Thu
Rapaport
Rapaport  Single Stone Auction

New York & Israel

www.rapaportauctions.com


  QUOTE OF THE WEEK
  We are confident that pure type IaAB synthetics cannot be produced. This confidence comes from many years of extensive research targeted at producing such material to test our detection methodologies.

Dr. Simon Lawson | De Beers Group

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  
 
De Beers Adds Five Sightholders

De Beers preapproved five new sightholders for the remainder of the 2012 to 2015 supplier of choice (SOC) contract period. The companies will be formally appointed before sight number four in May and include Vallabhbhai Dhanjibhai & Co., Star Rays, J.B. And Brothers | Yaelstar, D. Navinchandra Gems and Diambel, according to Rapaport sources.

De Beers modified its SOC replanning process to enable non-sightholder businesses that have demonstrated strong demand through auction sales. Sightholder ITO re-planning process underway also provides opportunities to qualify for new rough diamond allocations, subject to forecast availability. The 2014 to 2015 ITO period is the last in the current contract period. A new De Beers sightholder contract will start on March 31, 2015 and the application process will open in the third quarter of 2014. De Beers stated that the new contract will involve a simplified allocation process but include more rigorous financial compliance criteria.



 
All Synthetics are Detectable

De Beers asserts that all synthetic diamonds can be detected. The company has dismissed claims by EGL Asia-Diamond services that its DiamondView instrument failed to detect a type IaAB “synthetic” stone, passing it as natural. De Beers stressed that it is not possible for a type IaAB diamond to be synthetic. Consistent, reliable detection of synthetics is vital to preserve the integrity of the diamond industry.

Read the full story and analysis.



 
U.S. Jewelry Inflation -3%

The U.S. consumer price index (CPI) for jewelry declined 2.6% year on year to 172.11 points in February, the lowest index reading to be posted since March 2011. The highest CPI for jewelry was 183.5 points in January 2012. The CPI for watches was basically flat in February, up by just 0.6%, at 122.5 points or two points lower than the record high of 124.3 that was set in July 2013.

Continued price pressures on industry commodities contributed to a lower jewelry price index during the month. The price for gold in February was about 16% lower year on year, while platinum was down 8%. The RapNet Diamond Index (RAPI), the global benchmark for polished diamond prices, fell 3.3% year on year for 1-carat diamonds, while RAPI for 3-carat diamonds dropped 2.7%. RAPI for 0.50-carat stones increased 3.2% and the index jumped 11.1% for 0.30-carat diamonds. By comparison, the CPI for all product categories in February increased 1.1% year on year to set a new record high of 235.17 points.



RETAIL & WHOLESALE  
 
Wartski IDs Third Imperial Easter Egg

The Third Imperial Easter Egg, made by Faberge in 1887 and now estimated to be worth $33 million, will be briefly on display at Wartski in London from April 14 to 17. The rare find was set to be melted for scrap in the U.S. until its former owner, who purchased it for $14,000, discovered an old news clipping describing the egg online.

The Faberge piece supports a 3.2-inch egg on an elaborate gold stand supported by lion paw feet. Three sapphires suspend golden garlands and a central diamond is used to release the top and reveal a Vacheron Constantin watch. The man contacted Wartski, a Faberge specialist, the egg was authenticated and sold to a private buyer for an undisclosed sum. Wartski believes that at least two other Faberge eggs may still be in circulation but they remain unaccounted for.



 
LG, Google Power Up Watch Tech

LG Electronics is collaborating with Google on the LG G Watch, powered by Android Wear™, which extends the Android platform to wearables. LG expects to introduce the watch in the second quarter. LG G Watch will be compatible with a wide range of Android smartphones and will present information to users as they need it or whenever they speak "OK Google." The electronics firm explained that the LG G Watch presents a low barrier to entry for developers, too. The watch represents LG's fourth device that was developed in close collaboration with Google, following the Nexus 4, Nexus 5 and the LG G Pad 8.3 Google Play Edition.



 
Develop Smart Omnichannel Integration

Consumers are in control of the retail experience now and their expectations for a superior, personal and seamless shopping experience is only increasing by the week, in large part due to mobile devices. IBM conducted a webinar this week to share five best practices that retailers should consider as they develop an omnichannel strategy, which unifies the brand's channel marketing across a single experience.

Collect
Gather customer profiles, web analytics, shopping cart information and social media to build a ''lifetime'' of data that measures behaviors, preferences, interests and demographics.

Analyze
Data will provide actionable insights to identify the lifecycle of your customer experience so that the retailer can benchmark touch points of interaction. From this mapping, retailers create a deeper understanding of their audience and therefore can produce best practices for engagement.

Decide
While an omnichannel strategy is certainly scalable to any budget, data mapping enables the retailer to prioritize resource allocation. Nonetheless, whether funding affords the retailer to sync the customer experience across all digital channels or just a single platform to start, IBM said to plan message consistency across all phases.

Manage
Customer interaction a one-on-one experience. Omnichannel integration personalizes the shopping event by identifying real-time triggers in order to immediately interact with the customer. Personalization enables retailers to dynamically serve content based upon the shopper's profile, coupled with immediate choices and alternatives when he views product videos without making a purchase, modifies an order or abandons a shopping cart all together.

Optimize
Do customers navigate the path to a purchase that you desire? Measure customer deviations and capture their reactions in order to improve upon the user experience. In addition, measure your campaign performance against a comparable retailer or the industry as a whole. Providers that cater to the jewelry industry collect comparative benchmarks as part of their omnichannel solution offerings.



 
PDE Names Board, Founders

The Panama Diamond Exchange (PDE) named its directors and board members this week as: Eli Izhakoff, founding chairman, Erez Akerman, PDE's president, Ernest Blom, the World Federation of Diamond Bourses' president, Gaetano Cavalieri, CIBJO's president, and Avi Paz, the World Diamond Council's president. Founding PDE members include Maxim Shkadov, Jeffrey H. Fischer, Reuven Kaufman, Ronnie Vanderlinden, Alex Popov and Mehul Shah. The PDE is the first and only diamond bourse in all of Latin America and it will be the anchor organization for the new Panama Gem & Jewelry Center, which currently is under construction.



 
Group Names GIA as Ethical

The Ethisphere Institute named the Gemological Institute of America (GIA) as a 2014 World’s Most Ethical Company for a second consecutive year. The designation recognizes continued efforts to build and maintain a superior ethics and compliance to ensure the public trust in gems and jewelry through research discoveries, education, laboratory services and instrument development. Some well-known companies on the list included UPS, Starbucks, eBay, L'Oreal, PepsiCo and Visa.



MINING  
 
Gem Diamonds Reports Profit

Gem Diamonds reported that its revenue rose 5% year on year to $213 million in the fiscal year that ended on December 31. The increase resulted from improved rough diamond prices and higher polished sales. The group posted a profit of $38.2 million for the year compared with a loss of $77 million one year ago.

Top prices were achieved for Letšeng's production, particularly high-quality, large diamonds. The company sold 97,294 carats of diamonds from Letšeng for an average ‎‎$2,043 per carat, up from $1,932 per carat the previous year. Revenue was given quite a boost from the sale of a rare 12.47-carat blue diamond, which sold in October for $7.5 million, setting a Letšeng record of $603,047 per carat.



 
Severalmaz Triples Production Target

Severalmaz, a subsidiary of ALROSA, launched operations at its ''№2'' plant at the Lomonosov mining and processing division in the Arkhangelsk region of Russia. The company's first operating plant has been providing annual production of about 500,000 carats and now the mining firm anticipates that two processing operations will nearly triple carat capacity. The project hosts six kimberlite pipes with mineral reserves estimated at 197 million carats. Mining is currently taking place at the Arkhangelskaya pipe, where the launch of this second processing plant allows greater enough volume of ore for Severalmaz to target producing 1.7 million carats of diamonds this year.



 
Dominion Updates Targets

The Diavik diamond mine in Canada will produce 6.1 million carats this year and based on historical recovery rates, Dominion Diamond anticipates nearly 1 million carats from the recovery of reprocessed plant rejects. The updated mine plan for Diavik anticipates that the company's operating costs will reach $155 million this year, leading cost of sales to reach $280 million.

Dominion also expects to produce 1 million carats from the Ekati mine. Dominion expects to spend $100 million to continue development at the Misery Pipe and $55 million to develop the Pigeon pipe. Overall operating costs for Ekati are expected to reach $195 million during the year.




 
Anjin Downsizes Workforce

Anjin released numerous workers from its Marange operation, with conflicting reports regarding the motive, according to NewsDay. Workers claimed the company faces viability problems and is set to close, but management claims operations are normal and the workers were simply laid off as part of a general labor restructuring program. The news report suggested that most of the workers placed on leave were drillers from the exploration department, machinery operators as well as general labor.



STATS  
 
India

  Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $2,160 16% $3,225 -9%
Polished imports $564 20% $1,076 0%
Net exports $1,596 15% $2,149 -13%
         
Rough imports $1,490 12% $2,747 17%
Rough exports $113 34% $237 -31%
Net imports $1,377 18% $2,510 28%
         
Net diamond account $219 -3% ($361)  
         
Synthetic imports $11 112% $18 -1%
Synthetic exports $11 100% $20 166%


 
Belgium

  Feb. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,630 33% $2,607 23%
Polished imports $905 11% $2,195 13%
Net exports $725 78% $412 320%
         
Rough imports $1,361 18% $2,710 19%
Rough exports $1,421 29% $2,666 24%
Net imports ($61)   $44 -62%
         
Net diamond account $786 116% $369 650%


ECONWATCH  
 
Diamond Industry Stock Report

U.S. shares mixed with Charles & Colvard (+6%) pulling ahead and JCP (-5%) losing some ground. Indian shares all lower except Renaissance Jewellery and Titan, which were flat on the week. Mining shares mainly lower led by Rockwell (-9%) and ALROSA (-5%). View the extended stock report.

  Mar. 20 Mar. 13 Chng.  
$1 = Euro 0.725 0.720 0.005  
$1 = Rupee 61.33 61.19 0.1  
$1 = Israel Shekel 3.48 3.47 0.01  
$1 = Rand 10.90 10.80 0.10  
$1 = Canadian Dollar 1.12 1.11 0.01  
         
Precious Metals        
Gold $1,328.70 $1,372.40 -$43.70  
Platinum $1,425.00 $1,473.00 -$48.00  
         
Stock Indexes       Chng.
BSE 21,740.09 21,774.62 -34.53 -0.2%
Dow Jones 16,331.05 16,108.89 222.16 1.4%
FTSE 6,535.24 6,553.78 -18.54 -0.3%
Hang Seng 21,182.16 21,756.08 -573.92 -2.6%
S&P 500 1,872.01 1,846.34 25.67 1.4%
Yahoo! Jewelry 1,008.99 1,003.09 5.90 0.6%




INDIA MARKET REPORT  
 
Polished and Rough Trading Activity

Demand turned lower overall but stable demand continues for -2 sieve and 0.08ct. to 0.29ct. Lower production creating shortages, tight liquidity impacting dealers just as the financial year comes to a close. Read the full report.  




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