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RAPAPORT NEWS SERVICE | September 22, 2016 |
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Rapaport Weekly Market Comment September 22, 2016

Sentiment improves at Hong Kong show (7/10) with steady traffic but restrained buying ahead of National Day festival (Oct. 1). Good demand for 0.30 to 2 ct., G-J, VS-SI diamonds but sales were limited as suppliers refused very deep discounts. 3 to 4 ct. weak. Mixed demand for 5 ct.-plus. Picky Far East buyers shifting to lower price points and restricting inventory purchases. Excess Chinese inventories have been coming down with some buying to meet current demand. ALROSA Aug. rough sale +53% to $243M. Petra Diamonds FY revenue +1% to $431M, profit +12% to $67M. India Aug. polished exports +11% to $1.9B, rough imports +72% to $1.1B. De Beers, Mountain Province open Gahcho Kué mine.

RapNet Data: September 22
Diamonds 1,242,397
Value $7,900,621,86
Carats 1,331,885
Average Discount -30.28%

RAPI Chart
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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  Given the slowdown in China and Hong Kong, we were not expecting an exceptional performance, but foot traffic was heavier than forecast and there was certainly plenty of interest from buyers, even if they were looking for highly specific items and not buying in large volumes.”

Ernie Blom, president of the World Federation of Diamond Bourses

United States: Steady trading in New York with sentiment lifted by positive reports from Hong Kong show. Dealers focused on filling orders for the holiday season

Belgium: Trading more upbeat than before Hong Kong show. Good demand from U.S. retail programs with steady demand for 0.30 to 2 ct., G-J, VS-SI diamonds

Israel: Improved mood as dealers returned from Hong Kong. Steady demand for dossiers and 1 ct., G-J, VS-SI, GIA diamonds

India: Stable market with steady U.S. demand. Melee weak with pockets of better demand in +8 segment

Hong Kong: Dealers focused on closing transactions from last week’s show. Hong Kong retail sentiment weak due to tourist slump and high rentals

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Hong Kong Show Keeps Holiday Hopes Alive

The Hong Kong Jewellery & Gem Fair gave the diamond industry the assurances it sought for the important fourth quarter holiday season even as buying was cautious. Despite the challenging and changing Far East market environment, it can be considered a good show....

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HRD Antwerp Parts Company with CEO Macken

HRD Antwerp terminated its contract with chief executive officer Peter Macken after less than 18 months because of “differing strategic views.” The grading laboratory appointed Ari Epstein, CEO of the Antwerp World Diamond Centre, as its interim CEO. Epstein is the fifth person to lead HRD in four and a half years.

India’s Polished Diamond Exports Rise

India’s polished diamond exports jumped 11% to $1.94 billion in August, according to the Gem & Jewellery Export Promotion Council. Polished imports increased 9% to $264 million, leaving net exports 11% higher at $1.68 billion. Rough diamond imports soared 72% to $1.05 billion, while rough exports jumped 39% to $122.4 million. Net rough imports leapt 78% to $928 million. India’s net diamond account, calculated as the difference between net polished exports and net rough imports, slid 24% to $751 million.

Swiss Watch Exports Extend Decline

Swiss watch exports fell 9% to $1.38 billion (CHF 1.35 billion) mostly due to a 26% slide in shipments of precious-metal timepieces, according to the Federation of the Swiss Watch Industry. Items priced at $3,070 (CHF 3,000) or higher dived 14%, offsetting increases in certain less expensive categories. Orders from Hong Kong plummeted 29%, their 18th consecutive month of decline.

Color Diamonds Buoyant at Bonhams Auction

A rare oval-cut, 3.81-carat, fancy intense blue, I1-clarity diamond sold for $3 million (GBP 2.3 million), or $792,450 per carat, weighing in as the top lot at Bonhams jewelry auction in London. The auction totaled $8.4 million (GBP 6.4 million) and was 72% sold by lot. Colorless diamonds featured in the sale included a marquise-cut, 11-carat, D-color, VS1-clarity, type IIa diamond, which sold for $802,052 (GBP 614,500) or $72,913 per carat, triple the lower end of the pre-sale estimate.

U.S. Jewelry Store Sales Slide

U.S. specialty jewelry store sales fell in July in line with declines reported by the major U.S. jewelers during the second quarter. Sales fell 2.2% to $2.1 billion across outlets selling only jewelry and watch products during the month, according to the U.S. Census Bureau. Signet Jewelers earlier reported that same-store sales at its U.S.-based Sterling division fell 3.1% in the fiscal quarter that ended July 31, while its Zale U.S. division saw same-store sales decline 2.2%.

Consumers Show Tiffany Some Love Online

Tiffany & Co. was adjudged the “most loved” among 60 retail brands that have a presence on social media by analytics company NetBase. The researchers surveyed more than 430 million posts on social media platforms such as Twitter, Facebook and Instagram over the year to July 27. Amazon was the most mentioned, but none of the brands matched Tiffany for the level of positivity and passion among customers.

Gitanjali’s Sales and Profit Jump

Gitanjali Gems revenue grew 30% to $553.5 million (INR 37.1 billion) in the first fiscal quarter that ended June 30, The Mumbai-based retailer’s jewelry revenue leapt 36% to $440 million, outweighing a 1.6% decline in loose diamond sales to $124.5 million. Net profit for the period almost quadrupled to $8.6 million.

Asian Star Revenue Rises

Asian Star’s revenue increased 2.7% to $127.6 million (INR 8.55 billion) in the first fiscal quarter ending June 30, the Mumbai-based diamond manufacturer reported. Profit fell 3.9% to $2.9 million. Revenue from the company’s diamond segment advanced 4.1% to $118.1 million, outweighing a 12% drop in jewelry revenue to $13.4 million.

ALROSA Sales Jump in August

ALROSA said it sold $243 million worth of rough diamonds in August, representing a 53% rise from a year earlier when market conditions slumped. Polished sales totaled $6.3 million for the month. The Russian mining company noted the market was stable but maintained a “moderately conservative” outlook. It was the first time ALROSA announced a monthly sales value.

De Beers Opens 54M Ct. Gahcho Kué Mine

De Beers announced the launch of its largest mine outside southern Africa, Gahcho Kué, which is expected to produce about 54 million carats over its lifetime. The deposit is the world’s largest new diamond mine in the past 13 years and is on track for full commercial operation in the first quarter of 2017. The project is a joint venture between De Beers and Mountain Province Diamonds.

Lucapa Finds 104ct. Diamond at Lulo Mine

Lucapa Diamond Company recovered a 104-carat, D-color diamond at its Lulo mine in Angola. The type-IIa stone is the fourth rough diamond above 100 carats extracted from the deposit this year and the fifth since operations began. The company discovered 53 “special” stones above 10.8 carats in the first half of the year and a further 59 in July alone.

Petra’s Profit Rises on Lower Costs

Petra Diamonds reported profit increased 12% to $66.8 million in the fiscal year that ended June 30 as improved efficiencies and cost controls offset a 6% decline in rough diamond prices. Revenue increased 1% to $430.9 million, driven by a higher sales volume. Adjusted mining and processing costs were reduced 5.5% to $257.7 million. A weakening of the South African rand, meaning lower costs when reported in U.S. dollars, also boosted profit.

ALROSA Develops Synthetic Detection Equipment

ALROSA intends to start selling synthetic detection equipment next year. The miner developed the devices in conjunction with the Technological Institute for Superhard and Novel Carbon Materials, a Russian federal body. The contraptions sift out polished diamonds that originate from lab-grown or treated stones or from simulants such as cubic zirconia or moissanite. Weighing less than 1.5 kilograms, the devices can be plugged into a USB port or operated using a smartphone battery.

NDT Produces Biggest Synthetic Blue Diamond

New Diamond Technology (NDT) unveiled a 10.07-carat lab-grown diamond that it claims is the world’s largest polished blue synthetic diamond. The emerald-cut, fancy deep blue, SI1 stone was graded by the International Gemological Institute (IGI) in Antwerp and put on display at the Hong Kong Jewellery & Gem Fair earlier this month.

Rarity Calculator Launched for Color Diamonds

The Fancy Color Research Foundation (FCRF) unveiled a Fancy Color Rarity Evaluator to determine the scarcity of a fancy color diamond. The calculator provides an estimate for the number of diamonds mined each year, allocating a rarity level ranging from common to super-stone. The FCRF also plans to introduce “rarity certificates” for select jewelry before the end of 2016.

Second Jewelry Summit Scheduled for Tucson

The second Jewelry Industry Summit to advance sustainability and responsible sourcing initiatives will take place January 29 to 30 in Tucson. The forum hopes to build on the inaugural summit held earlier this year in New York where attendees committed to develop numerous project ideas. Goals of the upcoming include assessing which programs are effective, reviewing progress made on the initiatives already in place and developing a shared vision for sustainable business and responsible sourcing.

Diamond Industry Stock Report

Mining companies led gains among diamond and jewelry companies listed on the financial markets this week. Anglo American (+14%) enjoyed the sharpest increase after Barclays upgraded its rating on the stock and subsidiary De Beers opened a new mine in Canada. Petra Diamonds shares rose (+8.1%) on encouraging fiscal year earnings. Europe’s luxury retailers LVMH (+5%) and Richemont (+6.3%) gained, partially reversing the slump in share prices due to a cautious outlook for this year.

View the detailed industry stock report

  Sep 22 (11:15 GMT) Sep 15 (11:15 GMT) Chng.  
$1 = Euro 0.89 0.89 0.00  
$1 = Rupee 66.64 67.00 -0.36  
$1 = Israel Shekel 3.76 3.78 -0.02  
$1 = Rand 13.48 14.29 -0.81  
$1 = Canadian Dollar 1.30 1.32 -0.02  
Precious Metals       Chng.
Gold $1,334.85 $1,321.47 $13.38 1.0%
Platinum $1,052.00 $1,034.75 $17.25 1.7%
Silver $19.90 $19.00 $0.90 4.7%
Stock Indexes       Chng.
BSE 28,773.13 28,412.89 360.24 1.3%
Dow Jones 18,293.70 18,034.77 258.93 1.4%
FTSE 6,926.89 6,687.54 239.35 3.6%
Hang Seng 23,759.80 23,335.59 424.21 1.8%
S&P 500 2,163.12 2,125.77 37.35 1.8%

Polished Trading Activity

Stable market with steady U.S. demand. Chinese demand improving but Far East still cautious after Hong Kong show. Melee weak with pockets of better demand in +8 segment. Cushions and ovals steady, square fancy shapes weak. Margins tight due to expensive rough with steady manufacturing before Diwali (Oct. 30).

Read the Polished Diamond Trading Report

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