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Rapaport TradeWire June 2, 2016
Jun 2, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
June 2, 2016
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Industry
focused on Vegas shows. U.S. demand supporting the market but dealers cautious
as May consumer confidence index slips 2%. ALROSA expects short-term rough
market stability as 1Q sales +37% to $1.6B, profit +125% to $758M, inventory
reduced from 22M to 18M cts. Christie’s Hong Kong sells $61.7M (72% by
lot) with rectangular, 5.03 ct., fancy vivid ‘Aurora Green’, VS2 diamond sold
to Chow Tai Fook for $16.8M ($3.3M/ct.). Gitanjali Gems FY sales +22% to $2B,
profit +51% to $20M. Bruce Cleaver appointed De Beers CEO as of July 1.
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Diamonds |
1,190,336 |
Value |
$8,027,502,376 |
Carats |
1,280,962 |
Average Discount |
-28.62% |
www.rapnet.com
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The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network. |
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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
Diamonds are as relevant to today’s consumers, all over the world, as they were to their parents and their parents before them. Diamonds have also made positive contributions to a host of countries that have used their revenues wisely, to communities and to all who have been touched by their mystique and the practical benefits of responsible mining and ethical sourcing.
Bruce Cleaver, Anglo American's group director of strategy and business development, after his appointment as CEO of De Beers
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MARKETS
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United States: Trading slowed slightly after Memorial Day weekend
with many dealers waiting for the JCK Las Vegas show to source goods…
Belgium: Trading slowed as many Antwerp dealers traveled to
Las Vegas shows. Local buyers focused on finding bargains but suppliers holding
firm, at least until Vegas…
Israel: Slow polished trading. High hopes but low
expectations for JCK Las Vegas show with more than 60 Israeli companies
participating. Steady demand for 0.30 ct. to 1.99 ct., H-J, VS2-I2 diamonds…
India: Trading sluggish due to ongoing summer holidays.
Dealers waiting for Las Vegas shows hoping steady U.S. demand will stimulate
global trading in the coming months…
Hong Kong: Activity stable with
dealers eyeing trends and price movements at JCK Las Vegas. Relatively weak
local demand with concern about difficult retail environment...
Click here for deeper analysis |
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INSIGHTS
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Three Things the Diamond Trade’s Survival Depends On
The diamond industry is waking up to a new reality. Not only are the banks
insisting on stricter compliance standards and pipeline integrity, but the
largest mining companies and jewelry retailers are rapidly following suit. This
is forcing the industry to rethink the way it conducts business so that
‘transparency, responsibility and sustainability’ are engrained in the ethos of
the trade...
Click here to continue reading
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INDUSTRY
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Mellier Resigns as De Beers CEO
Philippe
Mellier (pictured) stepped down as chief executive officer of De Beers after five years,
with Bruce Cleaver appointed to replace him on July 1.
Cleaver has been group director of strategy and business development for
De Beers parent company Anglo American since last year. Before then he was
executive director at De Beers, responsible for strategy and commercial
relationships, and served as the diamond miner’s co-acting CEO for a year prior
to Mellier’s appointment in 2011. |
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De Beers to Bring Auction Viewings to New York
De Beers will hold auction
viewings in the U.S. for the first time with a showing of exceptional and
special stones in New York later this month.
The viewings are scheduled for June 28 to 30 at
the premises of the International Institute of Diamond Valuation before
an auction on July 20. The miner plans to include a wider range of products in future viewings, said Neil Ventura, De Beers
executive vice-president of auction sales (pictured). |
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GIA to Test Melee for Synthetics
The
Gemological Institute of America (GIA) is piloting a service to separate
natural and untreated diamonds from simulants and potentially synthetic or
treated gems.
The GIA Melee Analysis Service will analyze and sort stones measuring 1.1
millimeters to 3.8 millimeters in diameter with D to Z color. The
fully-automated system will process about 1,800 stones per hour and cost
between $0.08 and $0.30 per stone based on diameter.
The pilot, which launches in June at the GIA’s laboratory in New York, will be
offered at all GIA locations and is scheduled to be rolled out in the third
quarter. |
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EU Eyes 2018 Kimberley Process Chairmanship
The European Union (EU) is bidding for the role of Kimberley
Process (KP) vice chair in 2017, meaning it would assume chairmanship of the
organization the following year.
In a joint proposal made at the KP
intersessional meeting in Dubai in May, India would serve as vice chair
under the EU in 2018 and take on the role of chairman in 2019, India’s Ministry
of Commerce & Industry said. The position is currently held by the United
Arab Emirates (UAE) with Australia its vice chair and next year’s chair. |
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Kimberley Process to Readmit CAR, Venezuela
The Central African Republic (CAR) and Venezuela are edging
closer to a return to the Kimberley Process (KP) following the organization’s
intersessional meeting in Dubai last week.
The monitoring team assessing the CAR has “by
and large” completed its verification and due diligence on the first shipment
of rough diamonds from the country’s Berberati compliant zone, reported Ahmed
Bin Sulayem, the United Arab Emirates-based chair of the KP for 2016 (pictured).
Venezuela is
also on the verge of being admitted
after it suspended itself from the KP in
2008, Sulayem said. |
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IDE Mandates Disclosure of Inclusion Mapping
Rough sellers at the Israel Diamond Exchange (IDE) will be
required to disclose that a stone has undergone inclusion mapping under a
memorandum of understanding between the bourse and Sarine Technologies.
Sarine stores information on all unmarked stones scanned by
its Galaxy machines and will provide this information to the IDE on request,
said Uzi Levami, Sarine’s executive director and chief executive officer (pictured, right).
Yoram Dvash (left),
president of the IDE, proposed at the World Diamond Congress in Dubai in May
that the requirement be adopted by the World Federation of Diamond Bourses.
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RETAIL & WHOLESALE
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Green Diamond Breaks Auction Records
Christie’s
sold the ‘Aurora Green’ diamond to Chow Tai Fook for $16.8 million (HKD 130
million) at its Hong Kong auction Tuesday, achieving $3.3 million per carat.
The rectangular-cut, 5.03-carat, fancy vivid
green, VS2 diamond is the world’s largest natural fancy vivid green diamond,
Christie’s said. The selling price and the price per carat set world
auction records for a green diamond.
Christie’s garnered $60.7 million at the sale,
with 72% sold by lot and 73% sold by value.
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U.S. Jewelry Store Sales Rise in March
U.S. specialty jewelry store sales increased 3% year on year
to $2.12 billion in March, according to the latest data from the U.S. Census
Bureau. The growth at specialty stores was slower than for the sector as a
whole, as jewelry and watch sales across all channels advanced 4.2% to $4.65
billion during the month.
Specialty jewelry store sales in the first
quarter of 2016 increased 1.4% to $6.53 million. Total U.S. jewelry and watch
sales in the first quarter advanced 4.9% to $15.47 billion, according to
preliminary Rapaport News estimates. |
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Gitanjali Profit +51% as Jewelry Outpaces Diamonds
Gitanjali
Gems, one of India’s largest jewelry retailers, said revenue and profit surged
in the past fiscal year driven by a strong performance in its jewelry division
while its diamond revenue slid.
Group sales jumped 22% to $2.08 billion (INR
139.84 billion) and profit soared 51% to $20.1 million in the 12 months to
March 31, the Mumbai-based company reported. Jewelry sales surged 43% to $1.67
billion, outperforming the diamond segment, where revenue fell 24% to $475.4
million.
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Monthly Swiss Watch Exports Decline
Swiss watch exports fell in April with significantly fewer
higher-end and precious-metal timepieces shipped out of the country.
Total shipments slid 11% year on year to $1.63
billion (CHF 1.62 billion) during the month, according to data provided by the
Federation of the Swiss Watch Industry.
Shipments of watches with an export price of
more than $3,016 (CHF 3,000) slumped 13%, driving the overall downturn, the
federation said. Exports of timepieces made from precious metal fell 14% and
gold-steel watch shipments slid 13%.
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MINING
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ALROSA Sees Stronger Sales, Lower Inventory in 1Q
ALROSA reported revenue and profit surged in the first
quarter as the rough diamond market improved from last year’s slump.
Revenue jumped 37% to $1.56 billion (RUB 102.34
billion) in the three months to March 31 and profit more than doubled to $758.8
million. Diamond
inventories in rubles declined 18% to $718.1 million. This comes after the
miner’s stockpile increased
by more than 8 million carats through 2015 to 22 million carats at
the end of December following reduced demand. |
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Dominion Defers Jay Project
Dominion
Diamond Corporation has postponed a project by about two years that is expected
to add a decade to the lifespan of its Ekati mine in Canada.
Mining
and processing of kimberlite from the Jay project in the Northwest Territories
will not take place until late 2022 compared with an original plan of 2020.
Dominion revised the schedule because it determined that it could keep a
continuous ore supply from the existing Ekati mine for longer than expected,
giving it more time to work on developing Jay.
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Petra Appoints CFO and COO
Petra
Diamonds has appointed Jacques Breytenbach as its chief financial officer and
Koos Visser as chief operating officer effective June 30. Both have been
promoted from within the company.
The appointments follow a decision by David Abery (pictured) to step down as finance director
“to pursue other opportunities” after 13 years in the role. |
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Stellar Gets ‘Verbal’ Go-Ahead for Tongo Project
Stellar Diamonds said it was “verbally informed” that its
application for a license to mine at its Tongo project in Sierra Leone was
approved by the Minerals Advisory Board.
The licensing process is still subject to
written confirmation from the National Minerals Agency and approval of a
licensing agreement by the Minister of Mines. Stellar and the Government of
Sierra Leone will then negotiate fiscal terms. The resulting mining concession
agreement will require ratification through the country’s Parliament.
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GENERAL
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‘Young Diamantaires’ Aim to Nurture Next Generation
The World Federation of Diamond Bourses (WFDB) set up an
international program to develop the future generation of diamond dealers.
The ‘Young Diamantaires’ initiative was introduced
at the 37th World Diamond Congress in Dubai in May and will be led by Rami
Baron, who was elected chairman of the WFDB's promotion committee at the
summit. It aims to encourage communication among younger members of the
diamond trade. |
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New Fair Hits Antwerp Calendar
Antwerp
will get a new exhibition targeting the trade, with a “single-minded” focus on
diamond and diamond jewelry products.
The fair, known as CARAT+, will be aimed at the
entire industry from miners to retailers, according to its organizer,
Easyfairs, the events division of Brussels-based Artexis Easyfairs.The first edition is scheduled to run
from February 5 to 8, 2017, at the company’s Antwerp Expo.
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Panama Diamond Exchange Gets New Name
The Panama Diamond Exchange has been renamed the World
Jewelry & Diamond Hub, Panama, to reflect a broader range of goods being
traded in the bourse.
Management
also wanted a name that underlined the connection between the exchange and the
World Jewelry Hub (WJH), which hosts it. |
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Sarine Buys Diamond App Maker
Sarine Technologies acquired DiaMining, a developer of apps
that produce digital imagery of diamonds, gemstones and jewelry.
The deal was
valued at $1.2 million and encompasses DiaMining’s technology and assets.
Ramat Gan-based DiaMining offers point-of-sale
products that display still and video imagery which integrates with inventory
management systems, enabling sellers to showcase their inventory in a store, in
the back office or while still at a supplier. |
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ECONWATCH
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Diamond Industry Stock Report
Industry stocks rose in the Far East, led by Luk Fook (+8.2%), during a week in which government data showed a slower decline in April Hong Kong retail sales than last month. Movado (-14%) headed the U.S. retail declines on disappointing quarterly results. Mining stocks were mixed, with Peregrine Diamonds (+20%) the standout leader.
View the detailed industry stock report.
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Jun 2 (11:33 GMT) |
May 26 (10:07 GMT) |
Chng. |
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$1 = Euro |
0.89 |
0.89 |
0.00 |
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$1 = Rupee |
67.29 |
67.19 |
0.10 |
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$1 = Israel Shekel |
3.86 |
3.84 |
0.02 |
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$1 = Rand |
15.58 |
15.55 |
0.03 |
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$1 = Canadian Dollar |
1.31 |
1.30 |
0.01 |
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Precious Metals |
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Chng. |
Gold |
$1,215.35 |
$1,227.50 |
-$12.15 |
-1.0% |
Platinum |
$972.40 |
$1,003.58 |
-$31.18 |
-3.1% |
Silver |
$15.96 |
$16.43 |
-$0.47 |
-2.9% |
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Stock Indexes |
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Chng. |
BSE |
26,843.14 |
26,366.68 |
476.46 |
1.8% |
Dow Jones |
17,789.67 |
17,851.51 |
-61.84 |
-0.3% |
FTSE |
6,215.09 |
6,270.01 |
-54.92 |
-0.9% |
Hang Seng |
20,859.22 |
20,397.11 |
462.11 |
2.3% |
S&P 500 |
2,099.33 |
2,090.54 |
8.79 |
0.4% |
Yahoo! Jewelry |
1,014.80 |
1,042.35 |
-27.55 |
-2.6% |
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INDIA MARKET REPORT
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Polished Trading Activity
Trading
sluggish due to ongoing summer holidays. Dealers waiting for Las Vegas shows
hoping steady U.S. demand will stimulate global trading in the coming months.Sentiment relatively weak with liquidity tight amid rumors of possible
financial defaults. Manufacturing levels stable with steady rough demand from
small-to-medium size factories. Lingering concerns about polished oversupply
after robust rough trading in May.
Read the Polished Diamond Trading Report |
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