|
|
Rapaport TradeWire January 26, 2017
Jan 26, 2017 6:00 PM
By Rapaport
|
|
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
Rapaport Weekly Market Comment
January 26, 2017
|
|
|
Market hoping next week’s
Spring Festival will signal renewed growth in the Chinese jewelry market.
Diamond manufacturing increasing despite sluggish U.S. post-holiday demand.
Profit margins under pressure as rough prices rise at larger-than-expected
$720M De Beers sight. Miners anticipate strong rough market in 2017. ALROSA
plans 2017 production +6% to 39.2M cts. Petra Diamonds 1H sales +48% to $229M,
production +24% to 2M cts. De Beers 2016 sales volume +55% to 32M cts, average
price -10% to $187/ct., production -5% to 27.4M cts. Chow Sang Sang warns 2016
profit fell 30%-40%. Blue Nile unveils diamond buyback scheme. David Block to
replace Uzi Levami as Sarine CEO. |
|
| Diamonds |
1,259,990 |
| Value |
$7,588,402,271 |
| Carats |
1,341,632 |
| Average Discount |
-30.20% |
www.rapnet.com
|
 |
| 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. |
|
|
|
|
Get Current Price List | Subscribe to Rapaport | Join RapNet |
|
| |
QUOTE OF THE WEEK
Sentiment has changed and continues to change. So luxury is interpreted in a different manner. Luxury is about giving happiness and pleasure but it can’t be ostentatious. It must convey class and style and it must transcend price.
Roberto Coin, owner of his eponymous company, to Rapaport News at this week’s VicenzaOro fair.
|
|
|
|
MARKETS
|
|
|
|
|
| |
United
States: Trading relatively slow. Some buzz at India
Diamond Week in New York with dealers assessing available inventory and prices
rather than closing deals…
Belgium: Polished market quiet with rising concerns about
profitability following price increases at De Beers sight…
Israel:
Quiet market as dealer trading has slowed. U.S.
demand is order-specific while suppliers wait for larger post-holiday inventory
requests…
India: Polished trading cautious with buyers uncertain
about prices. Shortages in select categories but large volume of goods are in
production…
Hong
Kong: Dealer and wholesale markets quiet with most
companies on vacation for next week’s Chinese New Year festival (Jan. 28)…
Click here for deeper analysis |
|
|
|
INDUSTRY
|
|
|
|
|
| |
Rough Market Wakes Up at Large De Beers Sight
De
Beers rough-diamond sales jumped 32% to $720 million in January as
manufacturers restocked following the holiday season. The first sight is
traditionally strong after manufacturing slows during the November Diwali festival. It rises in the first quarter in anticipation retailers will
replenish inventory sold during the festive shopping period. The sight was the
largest sale since July 2014, according to Rapaport records, and prices
reportedly rose. |
| |
Blom Diamonds Set for $4M Takeover
Tychean Resources agreed to acquire 74% of Blom
Diamonds Cutting Works and Ernest Blom Diamonds for up to $4.1
million (AUD 5.5 million). Tychean will initially issue shares worth about
$206,352 (AUD 273,800), while additional
shares valued at $1.3 million will be granted in each of the next three years
if the diamond company meets pre-determined profit conditions. Founder Ernie
Blom (pictured), the current president of the World Federation of Diamond Bourses (WFDB),
will become managing director of Tychean when the deal closes.
|
| |
Sarine Appoints New CEO to Succeed Levami
Sarine
Technologies named David Block as its new chief executive officer after Uzi
Levami stepped down for personal reasons. Levami, who headed the diamond
technology company for eight years, will continue to serve as an executive
director at Sarine. Block (pictured) will take over on May 1, having served as the group’s
deputy CEO and chief operating officer since 2012. He played a key role in the
rollout of Sarine’s Galaxy inclusion-mapping systems.
|
|
|
|
RETAIL & WHOLESALE
|
|
|
|
|
| |
Hong Kong’s Chow Sang Sang Warns on Profit
Chow
Sang Sang warned profit slumped 30% to 40% in 2016 due to a drop in
jewelry demand in China and Hong Kong. The company added the decline was
steeper because a one-off gain from a corporate deal inflated the jeweler’s
profit in 2015. Weak consumer sentiment and a drop in Hong Kong tourist
arrivals have dented sales at the region’s top jewelry chains over the
past two years.
|
| |
Blue Nile Unveils Diamond Buyback Scheme
Blue
Nile launched a program allowing consumers to sell their diamonds to the online
retailer for cash. The service, developed with ecommerce specialist Mondiamo,
is currently only available in the U.S. and Canada. Mondiamo is using Blue
Nile’s live pricing data for GIA-graded diamonds to create a guaranteed
cash-price range presented to potential sellers. Customers are given a free,
insured shipping kit to submit their diamond jewelry for inspection and
evaluation, after which Blue Nile makes a final cash offer. |
| |
Samuel Aaron Jewelry Plant to Close
Richline
Group is shutting a jewelry-manufacturing plant in New York State following its
acquisition of The Aaron Group this month. The factory, located in Mount
Vernon, will close April 25, with all 42 employees being affected. Layoffs will
occur over 14 days beginning April 12. Richline will spend the next three
months working on plans to integrate employees, departments and facilities
following the merger, a spokesperson said.
|
| |
Birks Inks Deal to Sell Diamonds in Asia
Montreal-based Birks Group has tied up with online
retailer Luxify to sell top-end polished diamonds to consumers in Asia. The
companies will offer rare diamonds of Canadian origin on the Luxify ecommerce
site, headlining the launch with the 35.11-carat, fancy dark yellowish-brown
‘Radiant North,’ described as the country’s largest colored diamond. The
partnership represents a shift into a new market for Birks as it
currently operates 46 jewelry stores across Canada and the U.S. |
|
|
|
MINING
|
|
|
|
|
| |
Higher Carat Sales Drive De Beers Growth
De
Beers sales volume grew 55% to 32 million carats in 2016 as lower rough
prices and depleted polished inventories stimulated demand. The increases
reflect improved trading conditions compared to the second half of 2015, De
Beers explained. In 2015, demand plummeted due to oversupply and inflated
prices, resulting in bloated rough-inventory levels at the company. Those were
reduced in 2016 as production fell 5% to 27.3 million carats. The company’s
average sales price dropped 10% to $187 per carat during the year.
|
| |
ALROSA Targets Higher Rough Output
ALROSA is planning to raise production 6% to 39.2
million carats in 2017, underlining greater optimism in the diamond mining
sector. VTB Capital expects robust rough demand in the first half of 2017 will
support revenue-growth momentum at ALROSA. The bank projected the miner’s revenue will
increase 2% to $5.46 billion (RUB 323.33 billion) this year. ALROSA anticipates its production will
rise to 39.9 million in 2018 and peak at 41.5 million in 2019.
|
| |
Petra’s Rough Diamond Sales Sparkle
Petra
Diamonds revenue leapt 48% to $228.5 million in the six months that ended
December 31, due to mine expansions and a stable rough market. Sales by
volume jumped 47% to 1.9 million carats while prices on a like-for-like basis
were flat. The miner expects market conditions to remain steady in the current half-year.
Petra’s production jumped 24% to 2 million carats while a new processing plant
at the Cullinan mine will enable group output of up to 4.6 million carats this
fiscal year.
|
|
|
|
GENERAL
|
|
|
|
|
| |
Tough Year For Timepieces as Swiss Watch Exports Slide
Swiss watch exports slumped 10% to $19.45 billion (CHF
19.41 billion) in 2016 as demand continued to shrink in Hong Kong, the largest
market for the timepieces. The industry saw some improvement in December with
a gentler drop of 4.6% to $1.66 billion (CHF 1.66 billion). The exports were
buoyed by double-digit growth in orders from China and the U.S., the Federation
of the Swiss Watch Industry reported. Hong Kong remained sluggish, with
shipments to the municipality down 16% during the month.
|
| |
Swiss Gem Lab Launches U.S. Operations
Gübelin
Gem Lab, known for its expertise in colored gemstones, opened a lab in New York
as part of its global expansion and to enable greater participation in
U.S. trade fairs. The company has been laying the ground work for the launch
since 2015, and has become a member of the American Gem Trade Association
(AGTA). It will test gemstones on-site for the first time at the AGTA GemFair
in Tucson, which runs from January 31 to February 5.
|
| |
Stornoway Seeks New Finance Chief
Robert
Chausse has stepped down as chief financial officer of Stornoway Diamond
Corporation, just two months after the company launched operations at the
Renard mine in Canada. Chausse (pictured) served in the position for less than a year and
is leaving to pursue other career opportunities, Stornoway explained. The miner
intends to appoint a new CFO by March 1.
|
|
|
|
ECONWATCH
|
|
|
|
|
| |
Diamond Industry Stock Report
U.S. retail stocks gained as the Dow Jones Industrial Average broke the 20,000-point barrier for the first time. Birks Group (+26.5%) led the pack, continuing its rise since reporting strong holiday sales. Resurgent rough-diamond sales boosted De Beers parent company Anglo American (+3.3%), with investors also backing miners such as Lucara Diamond (+8.2%) and Gem Diamonds (+5%). European luxury stocks were mainly higher, headed by Damiani (+2.9%), while markets in India and the Far East were mixed.
View the detailed industry stock report
| |
Jan 26, 2017 (13:30 GMT) |
Jan 19, 2017 (13:05 GMT) |
Chng. |
|
| $1 = Euro |
0.93 |
0.94 |
0.00 |
|
| $1 = Rupee |
68.16 |
68.13 |
0.03 |
|
| $1 = Israel Shekel |
3.79 |
3.81 |
-0.02 |
|
| $1 = Rand |
13.35 |
13.60 |
-0.24 |
|
| $1 = Canadian Dollar |
1.31 |
1.33 |
-0.02 |
|
| |
|
|
|
|
| Precious Metals |
|
|
|
Chng. |
| Gold |
$1,190.47 |
$1,204.98 |
-$14.51 |
-1.2% |
| Platinum |
$975.65 |
$966.35 |
$9.30 |
1.0% |
| Silver |
$16.87 |
$17.02 |
-$0.15 |
-0.9% |
| |
|
|
|
|
| Stock Indexes |
|
|
|
Chng. |
| BSE |
27,708.14 |
27,308.60 |
399.54 |
1.5% |
| Dow Jones |
20,068.51 |
19,804.72 |
263.79 |
1.3% |
| FTSE |
7,178.49 |
7,212.14 |
-33.65 |
-0.5% |
| Hang Seng |
23,374.17 |
23,049.96 |
324.21 |
1.4% |
| S&P 500 |
2,298.37 |
2,271.89 |
26.48 |
1.2% |
|
|
|
|
|
|
|
INDIA MARKET REPORT
|
|
|
|
|
| |
Polished Trading Activity
Polished trading cautious with buyers uncertain
about prices. Shortages in select categories but large volume of goods are in
production. Polished inventory projected to rise in time for Hong Kong show
(Feb. 28) after large De Beers sight. Manufacturing profit under pressure.
Market starting to acclimate to demonetization but small businesses still
cautious amid tight liquidity. Steady demand for 0.30 to 3 ct., D-H, SI,
RapSpec A3+ diamonds.
Read the Polished Diamond Trading Report |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|