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Rapaport TradeWire March 20, 2015
Mar 19, 2015 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
March 20, 2015
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Weak demand severely restricting trading volume at current price levels. Shortages developing as Indians cut back production of better qualities by about 50%. Markets may stabilize if supply is reduced to lower levels of demand. Caution: Next week’s large sight may destabilize market as it increases supply and reduces liquidity in a highly problematic market with too many diamonds chasing too few buyers. Trade is advised to buy polished instead of rough and stop adding fuel to the fire. Gem Diamonds 2014 revenue +27% to $271M, profit +57% to $33M. India’s Feb. polished exports +4% to $2.3B, rough imports -23% to $1.1B. The Diamond Show opens March 19 at Markthalle in Basel.
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RapNet Data: Mar. 19
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| Diamonds |
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1,368,766 |
| Value |
$7,630,345,518 |
| Carats |
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1,294,985 |
| Average Discount |
-22.27% |
www.rapnet.com
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| The RapNet price index (RAPI) has been revised to reflect the average price of the ten best priced diamonds in each category. |
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
I believe in the power of solidarity. I have experienced troubles of my own. It has been the solidarity of others that has helped to strengthen my courage and resolve to continue my journey.
Rafael Marques de Morais | Blood Diamonds: Torture and Corruption in Angola
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RETAIL & WHOLESALE
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Swiss Watch Exports -2%
Swiss watch exports fell 2% year on year to $1.7 billion (CHF 1.689 billion) in February, according to the Federation of Swiss Watches. The group stated that the decrease was largely due to a sharp decline in exports to Hong Kong coupled with a dip in demand for precious metal timepieces. Exports by volume rose 2.6% to 2.189 million units. The federation explained that watch exports priced below $201 grew 9.2% by value and 6.2% by volume. The segment was the only price point that experienced growth during the month.
All timepieces priced over $201 saw a roughly 4% decline in terms of both value and volume. Exports of precious metal timepieces declined during the month, too, with gold watch exports down by 6.1%, while steel watch exports fell by 2.8%. Hong Kong, one of the three leading export markets for Swiss watches, saw the steepest decline in two years, down 21.8% to $276.9 million. Swiss watch exports to the U.S. rose 7.5% to $195.9 million, while exports to China increased 7% to $109.2 million. The European markets of Italy and the U.K reported sustained growth with exports to Italy up 17.6% to $98.9 million and exports to the U.K. up 54.2% to $96.6 million.
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TAG Heuer, Google, Intel Partner on Smartwatch
TAG Heuer, Google and Intel formed a partnership to launch a Swiss smartwatch that is powered by Intel® technology and Android Wear. The collaboration was made official at Baselworld in the TAG Heuer booth. TAG Heuer contended that the partnership will create a product that is both luxurious and seamlessly connected to its wearer's daily life. Swiss watchmaking and Silicon Valley is a marriage of technological innovation with watchmaking credibility, the partners stated. This collaboration provides a rich host of synergies, forming a win-win partnership and the potential for our three companies is enormous.
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Charles & Colvard's Loss Widens
Charles & Colvard Ltd. reported that sales fell 10% year on year to $25.6 million in 2014. Revenue across U.S. operations rose 7% to $22.1 million, while international sales plummeted 55% to $3.5 million. Charles & Colvard recorded a loss of $13.1 million compared with a loss of $1.3 million one year earlier. Loose jewel sales, including that of Forever Brilliant® moissanite, fell 30% to $12.9 million; however, sales of finished jewelry jumped 27% to $12.7 million. Wholesale business revenue fell 19% to $20.8 million and accounted for 81% of company sales, down from 90% of total revenue in 2013. Charles & Colvard's direct-to-consumer ecommerce business at Moissanite.com generated revenue of $3.4 million, an increase of 36% compared with 2013.
Charles & Colvard appointed Marvin Beasley to the position of president and CEO to succeed Randy McCullough, who informed the board on March 17 that he was retiring. Beasley has served as a director of the company since November 2009 after having spent the last 20 years of his retail career at Helzberg Diamonds, where he held various executive positions.
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Knot Fans Spend More in 2014
Fans of The Knot, a popular U.S. wedding resource website, spent an average of $5,855 on engagement rings in 2014, up 5% compared with 2013, according to the company's survey. The Knot found that the total average spending on weddings across its fan base grew 5% year on year to $31,213, while the average number of guests in attendance has shrunk to 136 from 149 in 2009. The Knot concluded that couples are focusing on creating an "amazing guest experience" and reception this year. Couples are choosing more personalized and unique venue locations and they are spending more on elements in the reception and less on the ceremony itself.
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Christie's Holds NY Sale on April 14
Christie’s will hold its spring sale of magnificent jewels in New York on April 14. The sale features 300 jewels, including diamonds, rare colored gemstones and natural pearls. The sale is expected to achieve a total in excess of $40 million. The top lot is a four-strand natural colored saltwater pearl necklace with a presale estimate of between $3.8 million and $4.5 million. Black pearls are known for their rarity with very few sold at auction over the past 50 years, according to the auction house.
Among the top diamond lots is an 80.73-carat, cushion-shaped diamond estimated to fetch up to $5 million and a 5.29-carat, fancy intense purplish pink diamond with a presale estimate of $3.5 million to $5 million. A 24.49-carat, pear shaped, D, internally flawless diamond has a presale estimate of between $2.5 million and 3.5 million, while a 5.04-carat circular-cut fancy gray-blue diamond has a presale estimate of $1.75 million to $2.5 million.
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Sotheby's Begins eBay Live Auctions
Sotheby's opened its previously announced live auctions on eBay, which is part of eBay's new sales platform, for browsing and advance bidding. Sotheby's first sale will take place on April 1 with the "New York" sale, which includes some jewelry, and a "photographs" sale. The Sotheby’s live auctions include high-resolution images, hosted video capabilities, and live streaming audio and video. All participants will see the exact item offered in the Sotheby’s New York salesroom and on eBay at the same time and have the ability to bid online in real time.
In other news, Sotheby's appointed Tad Smith as its new president and CEO effective March 31 to succeed Bill Ruprecht, who served as CEO since 2000. Smith will also join Sotheby's board of directors. Smith, 49, has been president and CEO of the Madison Square Garden Company since February 2014. In this role, he oversaw the overall strategy and day-to-day operations of MSG Sports, MSG Media and MSG Entertainment.
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Forevermark Introduces New Services
Forevermark facilitated an ecommerce pilot program that provides the flexibility for authorized partners to be wherever the Forevermark customer shops. Customers pulled into a store through an online purchase allow the Forevermark retailer to act as the showroom and a useful resource for supplemental services. In addition, Forevermark introduced a partnership with Diamond Asset Advisors (DAA) the Diamond Asset Service Program for jewelers, whereas they can obtain Forevermark diamonds on advantageous cash terms. Retailers have the flexibility to add inventory quickly at peak selling periods. The cost of the diamond becomes payable only when it is sold, but it may also be repaid earlier with no penalty. Rates are transparent and competitive.
Forevermark Focus, a regional training event, will return this year and take place in New Orleans and Las Vegas. Additionally, Forevermark announced an e-learning platform for authorized retailers and sales associates that is accessible through Forevermark's B2B website. Training modules are designed to increase knowledge and understanding of Forevermark and enhance selling skills through video, case studies and assessments.
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Pandora Expands Disney Collection
Pandora Jewelry unveiled its new spring 2015 Disney jewelry collection that was inspired by iconic love stories and enchanting fairy tales and features 60 jewelry pieces such as earrings, rings, pendants and charms. The new collection highlights Disney Princess characters with jewelry inspired by classic fairy tales, including Cinderella, Snow White, Beauty and the Beast and The Little Mermaid. Pieces are presented in hand-finished sterling-silver and enamel gowns, regal tiara dangles and colorful Murano glass charms. In addition, Mickey Mouse and Minnie Mouse continue to inspire new jewelry items in the spring 2015 collection with a sophisticated interpretation of Mickey's classic silhouette on sterling-silver "Dazzling Mickey" stud earrings. Coordinating "Mickey Silhouette" pieces feature the mouse cutout within a heart-shaped pendant, ring, bracelet and pair of earrings.
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Firenze Introduces New Arrivals
Firenze Jewels introduced new arrivals for both bridal and fashion as part of its spring 2015 jewelry collection for the Manhattan showroom. The brand determined that top trends demand Art Deco inspired jewelry, bold gemstone earrings, statement diamond necklaces and an assortment of stackable rings. In addition, popular gemstones include soft cool hues, such as pink and purple amethysts, as well as citrine stones, according to Firenze Jewels. The new collection also reflects various styles that have trended on the red carpet, such as over-sized gemstone dangle earrings and bold diamond necklaces. The company expanded its bridal jewelry with new intricately designed diamond wedding and engagement rings.
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GENERAL
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Morais Prepares for New Court Challenge
Rafael Marques de Morais, who exposed government and trading corruption in Angola's diamond industry, received a 2015 Index on Censorship Freedom of Expression Award for Journalism in London just days before facing a defamation trial in his home country. He operates the Maka Angola news website. Marques de Morais is the author of "Blood Diamonds: Torture and Corruption in Angola," which revealed the names of companies and government officials who were responsible for torturing and murdering villagers in the name of diamonds. He was subsequently detained by the government, but an initial charge was dropped. Military generals, however, brought criminal libel charges against the author and demand $1.6 million in restitution.
"On my return to Angola from this trip, I will be sitting in court on March 24 as the defendant on 11 separate charges of defamation brought against me by seven powerful generals and four of their business associates. I wrote a book that exposed human rights abuses in the diamond industry, in which the plaintiffs are major shareholders and whose private security company has executed many of the violations," he said. "I am proud and honored to stand up against such a mighty power to enable many of the victims to speak out through my reports, which I have been producing for the past 10 years. I will come out of this trial stronger and empowered by the experience," he said.
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De Beers Upgrades DiamondView
De Beers International Institute of Diamond Grading & Research (IIDGR) will provide DiamondView™ instrument upgrade details at GIA GemFest in Basel on March 22. DiamondView is part of the suite of IIDGR verification technology and generates a surface fluorescence image on any stone being tested, providing information on growth history from which synthetics can be identified. The upgraded DiamondView instrument incorporates easy-to-change filters to aid user interpretation of fluorescence images and the detection of synthetics. The latest version will be available for purchase in June.
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Schneirla Joins Worthy
Worthy.com appointed Peter C. Schneirla as the company's president, who will assume responsibility for forging strategic partnerships, fostering business growth and overseeing the expansion of Worthy's state-of-the-art, in-house grading labs. Schneirla said that as an entrepreneur, he was especially impressed by Worthy's team and compelling technology. Previously, Schneirla held various roles at Tiffany & Co., Harry Winston, De Beers, LVMH, the Gemological Institute of America (GIA) and others.
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PGI Promotes Reilly
Kevin Reilly was appointed the vice president of Platinum Guild International (PGI) USA after nine years of service. Reilly will report directly to Jenny Luker, the president of PGI USA. In his role, Reilly will lead trade programs and drive business development strategies at manufacturer and retailer levels. A jewelry industry veteran with over 20 years’ experience, Reilly began his career in the executive training program at Macy’s and spent nine years in a variety of different operations roles. Prior to joining PGI, he served as vice president of sales and marketing at Tache USA and as director of customer relations and new business development at Lazare Kaplan International.
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Dubai Conference to Attract 500
The Dubai Diamond Exchange (DDE) will host the Dubai Diamond Conference on April 21 and 22. Guest speakers include Paul Rowley, the executive vice president of De Beers Group sightholder sales; Andrey Polyakov, the vice president of ALROSA, and Carlos Sumbula, the president of Endiama. The conference will also welcome Edward Asscher, the president of the World Diamond Council; Ernie Blom, the president of World Federation of Diamond Bourses and Maxim Shkadov, the president of International Diamond Manufacturers Association. Centered on the theme "The New Silk Route," the Dubai Diamond Conference anticipates that 500 will attend.
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IIa Opens Diamond Growing Center
IIa Technologies opened a 200,000 square foot, state-of-the-art facility in Singapore to produce commercially-viable man-made diamonds. The diamond greenhouse was inaugurated by Tharman Shanmugaratnam, the Singapore Deputy Prime Minister and Minister of Finance, and was attended by representatives from the Economic Development Board. IIa Technologies also launched a "center of excellence" to further develop existing diamond growing technologies and offer high-quality grown diamonds for various technology industries and applications.
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Sarine Unveils 'Profile'
Sarine Technologies unveiled its latest evolution in cutting-edge technology aimed to boost the efficiency of the diamond trade -- the Sarine Profile. The new system provides diamond sellers the ability to “customize, personalize and fully integrate” their diamond’s detailed visual performance onto their websites and at various trading platforms.
The Profile, available in North America as of April, “tells the diamond’s story,” said Uzi Levami, the CEO of Sarine Technologies.
The Profile works by combining the technologies of three different Sarine instruments: The Sarine Loupe — which provides a virtual 3D image of the diamond, the Sarine Light — which details and grades the diamond’s light performance, and the Sarine DiaMension — which outlines with graphics the hearts and arrows and the cut and proportions of the stone.
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RapNet Advances Inventory Template
RapNet Instant Inventory, the jeweler’s go-to virtual diamond inventory solution, has a new advanced template and responsive design. RapNet’s extensive inventory of 1.5 million diamonds valued at over $8 billion from thousands of international suppliers is now available to select jewelers across the globe. Jewelers can choose the exact diamonds to feature on their websites from RapNet’s large network of vetted suppliers. The jeweler can then set individual mark-ups to ensure their profit margin on every sale. In addition, the new advanced template has a fully responsive design that can be displayed on desktop, tablet and mobile devices and can be customized to match the retailer’s brand for seamless integration into an existing website.
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MINING
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Gem Diamonds' Profit +57%
Gem Diamonds reported that revenue jumped 27% year on year to $270.9 million for the 12 months that ended on December 31. Cost of sales rose 26% to $129.6 million. Profit improved 57% to $33.2 million or 24 cents per share. The board approved a first dividend for shareholders of 5 cents per share for a total of $6.9 million payable on June 9.
The mining company's revenue was primarily derived from operations at Letšeng in Lesotho and from rough diamond manufacturing operations in Antwerp. Rough diamond sales included a 12% increase in volume of goods sold from Letšeng at 108,963 carats and a 24% increase in the value per carat at $2,540. Sales from mining operations at Ghaghoo in Botswana were not included since full commercial production had not been achieved during the fiscal year.
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Stornoway Records a Profit
Stornoway Diamond Corporation reported a profit of $7.7 million for the third quarter that ended on January 31. Construction on its Renard diamond project in Quebec was 17.4% completed, which was better than the 15.6% completion rate in the company's plan. Incurred costs and commitments as of January 31 totaled $225 million, or 27.7% of its fully-funded capital budget for Renard. The diamond project remains on schedule for first ore production in the second half of calendar 2016 and for commercial production in the second quarter of calendar 2017.
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Dominion Updates Ekati Reserves
Dominion Diamond Corporation filed its technical report, as required under National Instrument 43-101, for the Ekati diamond mine, which includes an updated mineral reserves and mineral resources statement. In the report, Dominion Diamond promoted 84.6 million carats of the Jay pipe and 1 million carats from the Lynx pipe to "probable mineral reserves."
The entire Ekati project, which includes Koala, Misery, Pigeon, Jay, Lynx and a core zone, buffer zone and stockpiles, was given a total "probable mineral reserves" of 105.8 million carats.
Total indicated mineral resources were 143 million carats and total inferred resources were 20 million carats. Mineral resources that are not mineral reserves have not demonstrated economic viability.
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Paragon Raises $192K
Paragon Diamonds raised approximately $192,000 (GBP 130,000) in new equity that will enable the company to do due diligence on a potential mine acquisition in Africa. The company did not disclose which mine it was considering, but noted that Paragon is one of a number of potential acquirers of the kimberlite mine.
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STATS
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India
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Feb. $Mil. |
%Chng. |
YTD $Mil. |
%Chng. |
| Polished exports |
$2,298 |
4% |
$4,091 |
27% |
| Polished imports |
$405 |
-15% |
$778 |
-28% |
| Net exports |
$1,893 |
18% |
$3,313 |
54% |
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| Rough imports |
$1,121 |
-23% |
$1,972 |
32% |
| Rough exports |
$88 |
-22% |
$195 |
-42% |
| Net imports |
$1,033 |
-25% |
$1,777 |
29% |
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| Net diamond account |
$860 |
286% |
$1,536 |
-25% |
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ECONWATCH
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Diamond Industry Stock Report
U.S., Far East and Europe shares all higher except for Charles & Colvard (-20%), Movado (-1%), Luk Fook (-4%) and LVMH (-1%). Indian shares mixed with C.Mahendra (+15%) way ahead and Goenka (-7%) leading declines. Mining shares mostly lower except Stornoway (+7%), Gem Diamonds (+4%), Petra (+7%) and Stellar (+3%). View the detailed industry stock report.
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Mar. 19 |
Mar. 12 |
Chng. |
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| $1 = Euro |
0.939 |
0.942 |
-0.003 |
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| $1 = Rupee |
62.52 |
62.52 |
0.0 |
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| $1 = Israel Shekel |
4.04 |
4.00 |
0.04 |
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| $1 = Rand |
12.32 |
12.31 |
0.01 |
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| $1 = Canadian Dollar |
1.27 |
1.27 |
0.00 |
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| Precious Metals |
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| Gold |
$1,171.90 |
$1,152.30 |
$19.60 |
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| Platinum |
$1,121.00 |
$1,113.00 |
$8.00 |
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| Stock Indexes |
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Chng. |
| BSE |
28,469.67 |
28,930.41 |
-460.74 |
-1.6% |
| Dow Jones |
17,959.03 |
17,895.28 |
63.75 |
0.4% |
| FTSE |
6,962.32 |
6,761.07 |
201.25 |
3.0% |
| Hang Seng |
24,468.89 |
23,797.96 |
670.93 |
2.8% |
| S&P 500 |
2,089.27 |
2,065.95 |
23.32 |
1.1% |
| Yahoo! Jewelry |
1,350.95 |
1,336.62 |
14.33 |
1.1% |
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INDIA MARKET REPORT
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Polished Trading Activity
Overall, the market is quiet. There are, however, many overseas buyers visiting. The sentiment is weak and cautious as rumors of financial problems at firms continue to rattle nerves. The liquidity situation remains tight. Read the polished diamond trading report.
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