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Rapaport TradeWire June 23, 2016
Jun 23, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
June 23, 2016
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Polished markets cautious. Hong Kong show begins
with low expectations for Chinese demand after relatively weak JCK Las Vegas
show. Prices stable at De Beers sight with boxes selling at mid-single-digit
premiums amid concerns that rough market fails to reflect sluggish polished demand.
Manufacturing steady. Swiss May watch exports -10% to $1.6B. Luk Fook FY
revenue -12% to $1.8B, profit -41% to $124M. Shrenuj FY revenue -34% to $266M,
loss of $6M vs. profit of $3M in previous year. India May polished exports +13%
to $1.9B, rough imports +15% to $1.5B. Rio Tinto merges diamond and copper
units to be headed by Arnaud Soirat. |
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| Diamonds |
1,227,660 |
| Value |
$8,191,947,803 |
| Carats |
1,320,274 |
| Average Discount |
-29.29% |
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
At first I wanted to scream. Then I said in a low hoarse voice 'God, it’s a diamond! It’s a diamond, it’s a big diamond!’
Lucara trainee Tiroyaone Mathaba, 27, on discovering the 1,109-carat Lesedi La Rona
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MARKETS
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United States: Polished trading quiet in New York ahead of July
vacation period. Post-Las Vegas demand weaker than previous years but U.S.
still considered the best market…
Belgium: Cautious activity in Antwerp. Dealers
waiting for this week’s Hong Kong show to gauge Chinese demand. U.S. demand
quiet but stable…
Israel: Polished trading quiet and buyers cautious. Large Israeli
delegation exhibiting at Hong Kong show. Good U.S. demand for 1 to 2 ct., G-J, SI-I1
goods…
India: Polished trading slow with very few foreign buyers
in the market and sluggish local Indian demand. Suppliers and buyers traveling
to Hong Kong show uncertain about Chinese demand…
Hong Kong: Market focused on show which starts Thursday (June
23-26). Expectations low as buyers from mainland China remain cautious and
Hong Kong retailers endure significant slowdown in customer foot traffic and
sales...
Click here for deeper analysis |
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FIVE-MINUTE INTERVIEW
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Rich New Diamond Mine Ready to Sparkle
Patrick Evans, president and CEO of Mountain Province, took time out to speak with Rapaport News about the prospects for the Gahcho Kué mine in Canada’s Northwest Territories...
Click here to read the interview |
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INDUSTRY
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De Beers Opens Selling Platform to Trade
De Beers is piloting a program allowing businesses to sell rough
diamonds from its online auction platform. The service is available for single
stones larger than 5 carats and fancy-color diamonds. It will only be open to
businesses that adhere to standards set by De Beers covering integrity of
diamond sellers, product disclosure and provenance.
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Shrenuj Downsizing After Somber Results
Shrenuj & Company is “rationalizing” its workforce after reporting an annual loss.
Employees have started tendering their resignations, the Mumbai-based diamond
and jewelry manufacturer said. Revenue on a standalone basis slumped 34% to
$265.7 million (INR 17.89 billion) in the fiscal year that ended March 31. The company also reported a $6 million loss versus a $3.1 million profit a year ago.
Revenue from the diamond segment dived 37%.
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JAPAC Lobbies on Synthetics Wording
The Jewelers
of America Political Action Committee (JAPAC) criticized a planned change to
the Federal Trade Commission’s “Guides for the Jewelry, Precious Metals, and
Pewter Industries” that would allow the term “cultured” when referring to
synthetic diamonds. A JAPAC-led delegation of jewelers raised the issue with
lawmakers in Washington, D.C., and said officials expressed interest in supporting their cause. Delegates
also pushed for legislation that would eliminate the sales-tax advantage that online retailers have over brick-and-mortar businesses.
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India’s Diamond Trading Advances in May
India’s
polished diamond exports jumped 13% year on year to $1.97 billion in May,
according to the Gem & Jewellery Export Promotion Council. Polished imports
soared 27% to $249.1 million, leaving net polished exports 11% higher at $1.72
billion. Rough imports leapt 15% to $1.52 billion and rough exports increased
7.9% to $127 million, leaving net rough imports 16% higher at $1.4 billion.
India’s net diamond account, the difference between net polished exports and
net rough imports, declined 3.8% to $329 million.
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Antwerp Says Diamonds Are ‘in our DnA’
Antwerp’s
diamond industry is aiming to invigorate the Belgian city’s reputation as a
global capital for the sector through a new campaign. Entitled ‘Diamonds and
Antwerp, it’s in our DnA,’ the initiative celebrates more than 550 years during
which the city has been “synonymous” with the precious stones, according to the
Antwerp World Diamond Centre. The program will involve a festive
diamond-themed period starting in October 2017.
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RETAIL & WHOLESALE
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Graff Reveals 105-Carat Diamond
Graff
Diamonds unveiled a pear-shaped, 105.07-carat, D, flawless diamond at the
opening of Graff’s new store at the Place Vendôme in Paris. The gem was cut and
polished by the jeweler’s own gemologists from a 314-carat rough stone
discovered last year at Gem Diamonds’ Letšeng mine in Lesotho. The diamond has
been named the ‘Graff Vendôme’ to commemorate the opening.
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Luk Fook’s Profit Plunges 41%
Hong Kong-based Luk Fook’s sales slumped 12% to $1.81 billion (HKD 14.03 billion) and profit plummeted 41% to $123.9 million in the past fiscal year. The company joined a string of jewelers in the region to be hit by a Chinese economic downturn and fewer tourist arrivals in Hong Kong. Sales were impacted by the strong U.S. and Hong Kong dollars relative to the Renminbi, while favorable exchange rates made locations such as Japan and Korea more attractive shopping destinations for Chinese tourists. |
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U.S. Jewelry Prices Rise in May
The U.S. consumer price index (CPI) for jewelry grew 3.3% in May from a month ago, according to the U.S. Bureau of Labor Statistics. The index jumped 9.9% from a year earlier. The May CPI for watches also climbed 3.3% over the previous month and spiked 7.2% from a year ago.
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Swiss Watch Exports Miss a Beat
Swiss watch
exports extended their decline in May because of a slump in shipments of
higher-value and precious-metal timepieces. Exports dropped 9.7% to $1.62 billion
(CHF 1.55 billion) as shipments of watches made from precious metals dived 24%
to $512.14 million. Exports to Hong Kong plunged 17%, continuing the downtrend witnessed
in recent months.
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Michael Hill to Restructure for Australia Listing
Michael Hill will move its primary stock-exchange listing to Sydney next month and set up a new parent company that will be incorporated in Australia. The jeweler, which traces its roots back to New Zealand, has shifted most of its key functions to Australia. The listing on the Australian Securities Exchange will be effective July 7.
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MINING
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Rio Tinto Merges Diamonds and Copper
Rio Tinto
will combine its diamond and copper divisions to form one product unit within a
new group structure. The move comes under Rio Tinto’s new chief executive
officer Jean-Sébastien Jacques (pictured), who will succeed Sam Walsh on July
2. Arnaud Soirat, currently head of the company’s aluminum primary metal
division, will be the London-based CEO of the merged copper and diamonds division
and join Rio Tinto’s executive committee.
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Cullinan Yields 121-Carat Whopper
Petra
Diamonds discovered a 121.26-carat rough diamond at its Cullinan mine in South
Africa. The white, type-II diamond of “exceptional” color and clarity was put
up for sale at a tender in Johannesburg this week. It is the last tender for
Petra in fiscal 2016, which will end June 30.
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Huge Diamond Made Sorter Want to Scream
The
1,109-carat Lesedi La Rona diamond was discovered by a 27-year-old trainee who
had worked at Lucara Diamond Corp. for fewer than five months. Tiroyaone
Mathaba found the gem while working as a sorter, examining rock and sand
produced by large diamond recovery machines, The Daily
Telegraph reported. “At first I wanted to scream,” Mathaba was cited as
saying. The diamond is expected to sell for more than $70 million at Sotheby’s
in London next week.
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Gemfields Ruby Sale Fetches $44M
Gemfields is
launching a campaign to market rubies from Mozambique after the company
reported its largest sale to date for stones from the country’s Montepuez mine.
The miner sold $44.3 million of rough rubies and corundum from
Montepuez at a June auction in Singapore. The gems fetched an average price of
$29.21 per carat from 1.5 million carats.
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GENERAL
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KP Chair Visits CAR
Ahmed Bin
Sulayem became the first sitting Kimberley Process chairman to visit the
Central African Republic (CAR). The tour comes after the country resumed
diamond exports following a three-year moratorium. Bin Sulayem (pictured,
left) met with Faustin-Archange Touadera, President of the CAR (right),
and Leopold Mboli Fratran, the newly appointed minister of mines.
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Antwerp Trade Selects AWDC Board
The Antwerp
World Diamond Centre (AWDC) last week elected its new board, which will appoint
the industry body's president and vice-presidents next week. Vimal Lakhani of
Kiran Exports and Nishit Parikh of Diarough were elected unopposed in category
1, representing firms in the highest revenue band. In the two contested
categories, Amratlal Chatankumar Shah of Simplex and Rajiv Kothari of
Diamstones were selected from the category 2 vote, while Samir Mehta of
Snehdiam and Jacques Weisz of Weisz Diamonds Belgium were re-elected for
category 3.
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Knightley Named Face of Chanel Jewelry
Keira
Knightley will front Chanel’s fine jewelry line “Coco Crush,” a role previously
filled by models such as Sigrid Agren and Jac Jagaciak. The star, who acted in Bend
It Like Beckham and Pirates of the Caribbean previously fronted Chanel’s
Coco Mademoiselle perfume and Rouge Coco lipstick. The advertisements were
photographed by Mario Testino, a favorite of Chanel. They are scheduled to
debut in fall 2016.
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ECONWATCH
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Diamond Industry Stock Report
Mining stocks were mixed this past week, led by Anglo American (+13.5%), with Rio Tinto (+8.1%) gaining on news of a corporate restructuring. Goldiam International (+28%) stood out in India where stocks were otherwise mostly stable. In the U.S., Signet (+3%) showed signs of a recovery after bad publicity prompted a slide in its share price in previous weeks.
View the detailed industry stock report.
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Jun 23 (12:06 GMT) |
Jun 16 (09:52 GMT) |
Chng. |
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| $1 = Euro |
0.88 |
0.89 |
-0.01 |
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| $1 = Rupee |
67.29 |
67.23 |
0.07 |
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| $1 = Israel Shekel |
3.82 |
3.87 |
-0.04 |
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| $1 = Rand |
14.46 |
15.34 |
-0.87 |
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| $1 = Canadian Dollar |
1.28 |
1.30 |
-0.02 |
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| Precious Metals |
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Chng. |
| Gold |
$1,263.95 |
$1,304.85 |
-$40.90 |
-3.1% |
| Platinum |
$974.75 |
$984.62 |
-$9.87 |
-1.0% |
| Silver |
$17.32 |
$17.72 |
-$0.40 |
-2.3% |
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| Stock Indexes |
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Chng. |
| BSE |
27,002.22 |
26,511.51 |
490.71 |
1.9% |
| Dow Jones |
17,780.83 |
17,640.17 |
140.66 |
0.8% |
| FTSE |
6,338.64 |
5,929.23 |
409.41 |
6.9% |
| Hang Seng |
20,868.34 |
20,038.42 |
829.92 |
4.1% |
| S&P 500 |
2,085.45 |
2,071.50 |
13.95 |
0.7% |
| Yahoo! Jewelry |
956.95 |
1,057.70 |
-100.75 |
-9.5% |
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INDIA MARKET REPORT
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Polished Trading Activity
Polished trading slow with very few foreign buyers
in the market and sluggish local Indian demand. Suppliers and buyers traveling
to Hong Kong show uncertain about Chinese demand. Steady demand for dossiers,
particularly 0.50 to 0.80 ct., G-J, SI-I2 and for 1 ct., G-J, SI-I2 diamonds. Manufacturing
remains steady at estimated 70 percent of full capacity. Rough trading stable
during sight week.
Read the Polished Diamond Trading Report |
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