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Rapaport Weekly Market Comment May 22, 2015

All eyes on Vegas with rising expectations for JCK Show. Far East demand weak. Polished shortages supporting prices and improving dealer demand as Indian factories close for summer vacation. Rough stable even though cutting center profit remains problematic. Letšeng Jan.-May sales -9% to $77.1M, average price -21% to $2,146/ct. Asian Star 4Q sales -12% to $138M, profit -1% to $4M. India April polished exports -11% to $1.6B, rough imports -31% to $1.4B. Belgium April polished exports +1% to $1B, rough imports -32% to $907M. Hong Kong 1Q polished imports -2% to $4.8B, polished exports -1% to $3.5B. Rapaport Vegas Breakfast, Sunday May 31, 8-10 a.m.; register

RapNet Data: May 21
Diamonds   1,393,564
Value $8,392,736,318
Carats   1,329,584
Average Discount -24.65%

RAPI Chart
The RapNet Diamond Index (RAPI) has been revised to reflect the average price of the 10 best priced diamonds in each category.

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Rapaport  Melee Auction

New York & Dubai
Tel. 1.212.354.9100

Rapaport at Antique Jewelry & Watch Show

Paris Hotel
Visit us at booth 1500

Show website and information

Rapaport at JCK Vegas

Mandalay Bay Convention Center
Visit us at booths B5447 & B5547

Show website and information.

Rapaport Breakfast & Conference at JCK Vegas
Mandalay Bay Resort

8 a.m. to 10 a.m. | South Seas Ballroom
Breakfast and Martin Rapaport's ''State of the Diamond Industry'' presentation.

10 a.m. to 11:30 a.m. | Banyan Ballroom
Rapaport Diamond Grading Conference 

3 p.m to 4:30 p.m. | Banyan Ballroom
Responsible Sourcing Conference

View conference details and register. These events are free but seating is limited.

Rapaport Melee Auction

New York


  The disappearance of U.S. consumer spending in early 2015 has now become even more mysterious, as some of the excuses shopped around earlier, like bad weather, are looking more stretched with the passage of time.

Paul Ashworth | Capital Economics

Trade Alert - Update May 21

As a follow up to the May 12th Rapaport Trade Alert, the Gemological Institute of America (GIA) has issued a laboratory alert recalling 424 diamond grading reports, which can be viewed here with shape, size, color and clarity of the diamonds.

The GIA suspects that the diamond were treated with a process that temporarily improved their color by up to three grades. The Israel Diamond Exchange says that they have received reports that some of the diamonds on the list were not over-graded.

The GIA has “terminated submissions” from the following clients who submitted treated diamonds without disclosure. LYE Diamonds, E.G.S.D. Diamonds, Abramov Romok, Yair Matatov. Pending further investigation, RapNet and the Rapaport Group has suspended service to these companies and to the following individuals are believed to be associated with the companies. Nati Yizrov, Gavriel Yelizarov, Yair Matatov. All the diamonds with recalled grading reports have been delisted from RapNet.

Members of the trade that have access to such reports are asked to urgently email us at GIA@Diamonds.Net. If the reports are in their possession they should cut them in half. The diamonds and the canceled reports may be sent to GIA for expedited free re-grading service. They may also be delivered to Rapaport offices in Israel, India and Belgium for this free service. Buyers should be careful not to buy these diamonds based on the GIA grading reports and sellers should not sell the diamonds with these grading reports.  We advise that in the event the diamonds were over-graded the best course of action is to cut the canceled grading reports in half and return the diamond and the cut report to the supplier against a full refund. If any RapNet members have difficulty returning diamonds please email

Platinum Jewelry Production -3%

Thomson Reuters' “GFMS Platinum & Palladium Survey 2015” revealed that the platinum market recorded a production deficit in 2014, prior to inventory movement, of 1.02 million ounces, mainly due to significant workers strike action in South Africa. Platinum production plunged 21% year on year to a 15-year low of 4.7 million ounces, the report stated. Nonetheless, inventory remains "abundant."

Palladium has held to a deficit since 2007; however, the imbalance turned more severe at 1.58 million ounces -- the largest in more than a decade, GFMS stated. Palladium production dropped 7% to 6.04 million ounces, which was a 12-year low. GFMS anticipates that prices for platinum will average at $1,170 per ounce this year, a drop of 16% compared with the average for 2014, while the average price for palladium is forecast to remain the same year-on-year at $800 per ounce. Jewelry scrap platinum increased 5% in 2014, while jewelry manufacturing declined 3% to 2.57 million ounces, marking the first decline in three years. Palladium jewelry scrap increased 8% and jewelry demand fell for a sixth consecutive year, dropping 9% to 470,400 ounces.

Asian Star's 4Q Profit -1%

Asian Star Co. Ltd. reported that revenue declined 11.6% year on year to $137.5 million (INR 8.73 billion) in the fourth quarter that ended on March 31. Standalone revenue slipped 16.4% to $94 million. Company-wide sales of diamonds fell 12% during the period to $129.5 million, while jewelry sales dropped 8.8% to $12 million. At the end of the fourth quarter, the value of diamond inventory rose 15.7% year on year to $78 million, while the value of jewelry inventory jumped 18.1% to $13 million. Expenses during the period were reduced by 11.9% to $131.4 million. Profit fell 1.4% $4.1 million.

During the fiscal year, Asian Star reported that revenue fell 0.9% to $507.5 million, while standalone sales dropped 0.6% to $437 million. Diamond sales were basically flat at $457.2 million, while jewelry sales fell 1.2% to $74 million. Expenses were reduced by 0.9% to $488 million and profit rose 5.1% to $12.9 million.

Kingold's Profit -59%

Kingold Jewelry Inc. reported that revenue fell 32.9% year on year to $206.2 million in the first quarter that ended on March 31. The company contended that sales were dramatically reduced by $85.9 million from weak demand for gold products and they fell $13.2 million as a result of lower gold prices. Kingold also took a $3 million write-down on inventory due to the decrease in gold prices during the period. Gross margin fell to 5.2% compared with 8.7% one year earlier. Profit fell 59% to $6.6 million or 10 cents per share. In an update on the company's Jewelry Park, the company is solely focused on completing all exterior and interior design elements and confirmed it was on track to open in December.

Heritage Jewel Auction Achieves $5M

Heritage Auctions' sale of fine jewelry achieved $5 million earlier this month with the top lot, a 5-carat, fancy light pink diamond ring by Chopard, selling for $605,000. The company stated that multiple bidders competed for large, single diamonds and exceptional pieces by top designers, including a 6-carat fancy pink diamond bracelet, also by Chopard, which sold for $485,000. One 8-carat, H, internally flawless, unmounted diamond sold for $221,000 and a 16.87-carat unmounted diamond, from the Kelsey Lake Mine in Colorado, hammered for $185,000. Heritage stated that the Kelsey stone set a record as the largest polished diamond of North American origin and it was offered with a letter from Diamond Company N.L. describing the discovery of the 28.20-carat rough diamond.

Police Charge 8 in London Heist

London's Metropolitan Police arrested 10 men this week in connection with the April Hatton Garden diamond and jewelry heist and recovered an undisclosed amount of goods. On May 21, eight men appeared before the Westminster Magistrates Court and were charged with conspiracy to burgle and remain in custody pending a June 4 court date. A ninth suspect, who is 43 and still under investigation, was released on bail and a tenth suspect, who is 42, was arrested on May 21 and taken into custody. Charges were brought against Terry Perkins, 67, John Collins, 74, Daniel Jones, 58, Hugh Doyle, 48, William Lincoln, 59, Brian Reader, 76, Paul Reader, 50, and Carl Wood, 58.

Komehyo Opens in Hong Kong

Komehyo Hong Kong Ltd., a subsidiary of Komehyo Co. Ltd. of Japan, opened a showroom in Hong Kong as part of the company's expansion plans. The new location will offer preowned jewelry, watches, brand named handbags and other accessories. The company contended that in the past few years, it has been trading preowned jewelry and watches at Hong Kong trade fairs. "We have seen strong demand for luxury watches and diamond jewelry from overseas buyers. The opening of the showroom shows our growing confidence in Hong Kong," said Toshio Sawada, the president of Komehyo Hong Kong.

Royal Asscher Kicks Off New Campaign

Royal Asscher developed a new global advertisement campaign, featuring supermodel, actress and philanthropist Nicola Breytenbach as the face of the brand ahead of the JCK Vegas show. The campaign was shot by Anthony Friend and will appear in worldwide advertisements. The advertisement campaign reflects the combination of the contemporary beauty of Breytenbach with the heritage of the iconic Royal Asscher company. The new patented Royal Asscher Brilliant Cut and the Royal Asscher Seventy Four collection® are featured in the campaign, next to the Stars and other fine jewelry collections. An online video commercial and “the making of” video will be released as well. The campaign was shot with Breytenbach and her two daughters to invoke emotion and a spectacular image, according to the brand.

Mojica Joins Hearts On Fire

Mike Mojica joined the Hearts On Fire team as the director of business development. With 38 years of experience under his belt, Mojica has sold and marketed loose stones for De Beers sightholders, introduced the Krieger Fine Jewelry line and launched Cushette for Michael Werdiger among other accomplishments. Mojica’s career began in corporate marketing with Zale Corporation more than 30 years ago, he has served on the board for the Southwest chapter of the 24Karat Club and as an advisor for AGS.

Rahaminov Appoints Regional Sales Dir.

Rahaminov Diamonds of Los Angeles appointed Zach Buss as its new southern regional sales director. Previously, Buss was the district manager for Riddles Jewelry in Wyoming. Rahaminov added that Buss and his family recently relocated to Southern California to be closer to relatives. Outside of the office, his passions include hockey, golf and cooking.

Scott Kay Appoints Pres.

Scott Kay appointed Michael Benavente as the company's president. Benavente brings more than 25 years of experience in sales, marketing, distribution and luxury brand management to the jewelry brand and most recently was the managing director for the Americas region at Gucci Group's watches and jewelry division. Earlier in his career, Benavente re-launched the Longines Watch brand in the U.S. and brought the ESQ Watch division to market for the Movado Group.

GIA Plans Career Fair in NY

The Gemological Institute of America's (GIA) jewelry industry career fair will be held in New York at the Javits Center on July 27, from 8 a.m. to 1 p.m. As always, this event hosts representatives from gem and jewelry companies, many of whom are seeking a variety of professional skills such as marketing, sales, design, manufacturing and more. To begin the day, GIA's CEO, Susan Jacques, will moderate a panel discussion titled “Job Success in Today’s Market,” featuring Jeremy Dunn of The Rephinery; Rhonda Edelman of Tiffany & Co.; Myriam Gumuchian of Gumuchian; Michael O’Connor of Style & Substance Inc. and Lee Siegelson of SIEGELSON. GIA hosted its first jewelry career fair in 1991 in Santa Monica, California and has now held more than 50 events.

Group Plans Industry Summit in NY

The upcoming Jewelry Industry Summit secured its first sponsor, the JA New York Show, which will provide registration services and the use of its discounted hotel block to conference attendees. Organizers of the event also announced a date change, scheduling the summit for March 10 to 13, 2016 in Manhattan, in advance of JA New York. Summit attendees will gain entry to the trade show with their registration. The Jewelry Industry Summit is designed to be an interactive event and facilitate discussions on sustainability and responsible sourcing. The goal is to create awareness of supply chain challenges, develop tools to take actions that benefit the jewelry industry, create business opportunities and open new sources of value for suppliers and the consumer to ensure that the industry will thrive in the 21st Century.

NY Antique Jewelry Show Begins July 24

The New York Antique Jewelry & Watch Show, which is schedule for July 24 to 27 at the Metropolitan Pavilion in Manhattan, confirmed at least 100 "elite dealers" will participate in the show, presenting sought after collections and gems. The show runs concurrently with the JA New York summer show at the Javits Convention Center and attendees at JA New York will receive complimentary access to the New York Antiques Jewelry & Watch Show on July 27 at 9 a.m., two hours before the show opens to the public, according to the organizers. U.S. Antique Shows, a division of Emerald Expositions, produces antique and antique jewelry trade events in Las Vegas, Los Angeles, Miami, Miami Beach and New York. The jewelry portfolio is comprised of trade and consumer events including the U.S. Antique Shows division, Couture, JA New York (summer and winter), and JA Special Delivery.

U.S. Updates Diamond Trade Participants

The U.S. Department of State published an update on participating countries and entities in the Kimberley Process Certification Scheme (KPCS) for the purposes of the Clean Diamond Trade Act of 2003. The latest revision follows an update from August 11, 2014 to reflect some changes to country trade bodies and to add Mali and to reiterate the suspension of Venezuela and the Central African Republic (CAR) from trading rough diamonds. Section 4 of the Clean Diamond Trade Act requires the sitting U.S. president to prohibit the importation into, or the exportation from, the U.S. of any rough diamond, from whatever source, that has not been controlled through the KPCS. Section 6(b) requires the president to publish a list of all participants, and all importing and exporting authorities, while section 3(4) defines "importing authority" as one or more entities designated by a participant to enforce the laws and regulations of the KPCS.

The following list names countries and their approved rough diamond trading entity.

Gem Diamonds' Sales -9%

Gem Diamonds reported that diamond sales from the Letšeng mine in Lesotho garnered $77.1 million at an average price of $2,146 per carat during the first three tenders of the year that took place between January and May 20. The average price was 21% below those recorded one year earlier, while total sales fell 9%. Prices were flat compared to the preceding fourth quarter of 2014. Production at Letšeng reached 31,369 carats during the period January to April, which was 8% lower than the preceding four month period. The average grade recovered fell 3% between the periods to 1.58 carats per hundred tonne. Gem Diamonds is also developing the Ghaghoo mine in Botswana, where it has recovered 16,174 carats of diamonds from 67,330 tonnes of treated ore to date. The mine is on track to ramp up to full production in the second half of 2015, the company stated.

De Beers to Sell Tailings Op.

De Beers has placed its Kimberley mines tailings operation on the market and has been investigating ways to extend the economic life of the operation, which is located in South Africa. The company stated that over the course of the past decade, it has taken steps to sustain the operation and did succeed in maintaining production during the economically challenged period. De Beers anticipates securing a sales agreement in just a matter of months, after which the transfer of the operation to a new owner must meet all regulatory requirements, and be handled with appropriate care to avoid unnecessary delay, according to the company's statement.

Zimbabwe's Diamond Sales Plummet

Zimbabwe's Mines and Mining Development Deputy Minister Fred Moyo told Parliament that a planned diamond mining company merger should be completed by the end of 2015, according to The Herald. The new company, which would control diamond assets in the Marange fields and be 50% owned by the government, will have to establish a strategic plan for competitive marketing and production. He also stated that diamond output fell 34% year on year by volume to 5.9 million carats and dropped 23% by value to $350 million in 2014.

However, The Zimbabwean reported that the consolidation plans are now in limbo as Anjin, Diamond Mining Co., Jinan, Marange Resources and Mbada Diamonds are resisting the merger, citing their original contractual agreements with the government.

Lucapa Parcel Achieves $2M

Lucapa Diamond Company Ltd. sold a fourth parcel of diamonds from its Lulo diamond concession in Angola, achieving $2.3 million or $1,500 per carat. The parcel included a 63.05-carat, D, type IIa stone. Lucapa's proceeds from the four parcels, totaling 3,856 carats, reached $7.7 million, or nearly $2,000 per carat. Next, Lucapa is moving its alluvial mining operations to the high-grade diamond zones of BLK 08, 06 and 19, where several large stones have been recovered during bulk sampling. The company anticipates offering the next parcel of Lulo diamonds for sale in June.

Shore Gold to Raise $2M

Shore Gold Inc. intends to raise up to $2 million through a non-brokered private placement of common shares at a price of 20 cents per unit. Each unit will consist of one common share and one common share purchase warrant, with each warrant entitling the holder to purchase one common share at 25 cents for a period of 18 months from the date of issue. The offering is expected to close on or about June 12, 2015, provided that it may close in one or more tranches, but no later than July 3, and it is subject to the approval of the Toronto Stock Exchange. Proceeds from the placement are intended to advance the Star-Orion South diamond project and for general corporate purposes. Shore Gold is nearing the completion of its large diameter drilling program at the Orion South kimberlite and intends to re-estimate Orion South's mineral resource.

Diamond Industry Stock Report

U.S. retail shares were all higher except Charles & Colvard (-2%) and Walmart (-3%), while Far East firms were all lower except Luk Fook (+1%). Europe's shares all rose except Kering (-1%) and India's industry stocks were mixed with Classic Diamond (-9%) and Ren. Jewellery (+7%) defining the spread. Mining shares were mostly improved with Kennady (+18%) far ahead of other gains. View the detailed industry stock report.

  May 21 May 14 Chng.  
$1 = Euro 0.899 0.876 0.023  
$1 = Rupee 63.57 63.38 0.2  
$1 = Israel Shekel 3.87 3.82 0.05  
$1 = Rand 11.84 11.79 0.05  
$1 = Canadian Dollar 1.22 1.20 0.02  
Precious Metals        
Gold $1,206.10 $1,221.10 -$15.00  
Platinum $1,153.00 $1,157.00 -$4.00  
Stock Indexes       Chng.
BSE 27,809.35 27,206.06 603.29 2.2%
Dow Jones 18,286.54 18,252.24 34.30 0.2%
FTSE 7,013.47 6,973.04 40.43 0.6%
Hang Seng 27,523.72 27,286.55 237.17 0.9%
S&P 500 2,130.84 2,121.10 9.74 0.5%
Yahoo! Jewelry 1,316.94 1,303.86 13.08 1.0%

Polished Trading Activity

There is steady polished demand across the local market and prices remain firm. Some overseas buyers are visiting and the market is preparing for the Vegas shows; however, liquidity remains very tight. Read the polished diamond trading report.


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