TradeWire® Weekly Email




  Rapaport TradeWire  
Rapaport TradeWire
RAPAPORT NEWS SERVICE | Dec. 12, 2014   www.rapaport.com | news@rapaport.com
 
 
Industry Retail EconWatch Mining Stats India General
Facebook Twitter RSS
 
 
Rapaport Weekly Market Comment Dec. 12, 2014


Prime Minister Modi and President Putin open World Diamond Conference in New Delhi. ALROSA to raise rough supply to India as Mumbai gets special rough trading zone. Warning: Polished prices under severe pressure with sharp drop in trading as buyers demand lower prices. Some suppliers significantly lowering prices to raise cash as liquidity dries up. Markets unstable due to imbalance between rough and polished prices. De Beers rough price index +7% in 2014. Christie’s NY sale at $67M (75% by lot) with pear, 89.23ct., D, VVS1 selling for $11M ($124K/ct.). Sotheby’s NY sale at $44M (76% by lot) with 25.44ct., D, VVS1 selling for $3M ($117K/ct.). U.S. Oct. polished imports +1% to $2.2B.


RapNet Data: Dec. 11
Diamonds   1,553,544
Value $8,116,123,687
Carats   1,518,745
Average Discount -28.51%

www.rapnet.com

RAPI Chart

Get Current Price List | Subscribe to Rapaport | Join RapNet

 
RAPAPORT ANNOUNCEMENTS
Rapaport
RapNet App

New features added include member directory and tradescreen!

Download RapNet's app for the iPhone.

January
13-21
Tue-Wed
Rapaport
Rapaport Melee Auction

New York & Dubai
 
View Details.


January
14-21
Wed-Wed
Rapaport
Rapaport  Single Stone Auction

New York & Israel

www.rapaportauctions.com



  QUOTE OF THE WEEK
  We are trying to get Russia to sell even more diamonds directly to us. Russia, being the biggest producer of rough diamonds in the world, and India, being the biggest center for cut and polished diamond manufacturing, are natural partners.

Vipul Shah | Gem & Jewellery Export Promotion Council

Careers@Rapaport  
 

The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.




INDUSTRY  
 
Delhi Diamond Conference Boosts Trade Deals

Over the past month, India's diamond industry scrambled to bring together global leaders in Delhi to coincide with a state visit from President Vladimir Putin, who met with Prime Minister Narendra Modi this week in an effort to strengthen India-Russia economic cooperation. The two world leaders signed a lengthy economic pact covering energy, technology and defense, among other sectors, and they addressed industry leaders at the inaugural World Diamond Conference India.

On the sidelines of the event, ALROSA signed long-term supply deals with 12 Indian diamond firms, reducing Indian's reliance on the middleman and supplying about $2.1 billion of rough goods directly during the next three years. Modi called upon other major suppliers to sell direct to India to further minimize dependency upon Antwerp and Dubai. In addition, India announced it would create a special trade zone at the Bharat Diamond Bourse to import rough on consignment and re-export unsold goods. The Gem & Jewellery Export Promotion Council (GJEPC) has been actively lobbying for such a trading zone in order to compliment jewelry manufacturing and diamond polishing activity.

Representatives from Rio Tinto and the Forevermark brand recognized India as an increasingly important market for polished goods, as well. Stephen Lussier, the CEO of Forevermark, said that the emerging middle class is largely responsible for driving up diamond jewelry acquisition rates in India to 9% this year compared with only 2% in 2002.

Rio Tinto Diamonds' managing director, Jean-Marc Lieberherr, said its flagship Indian marketing initiative, Nazraana™, which promotes affordable diamond jewelry as gifts for all occasions, remains a strong focus for the firm. Rio Tinto pans to develop the Bunder diamond project in Madhya Pradesh, offering a unique opportunity to produce diamonds that can later be manufactured and marketed on a commercial scale in the country.



RETAIL & WHOLESALE  
 
U.S. Jewelry Store Sales -4%

Specialty jewelry store sales in the U.S. fell 3.9% year on year to $2.37 billion in October. The sharp drop was not as obvious in the preliminary jewelry and watch sales total during the month, which Rapaport News reported on November 28, reflecting a sector decline of just 0.6% to $5.461 billion. Still, specialty jewelry store sales have risen 3.3% to $24.733 billion for the first 10 months of 2014, while jewelry and watch sales across all channels were up by 2% to $49.7 billion, according to preliminary estimates.

Meanwhile, advanced sales estimates for U.S. department stores fell 0.7% to $16.844 billion in November, signaling a continued weakness for the big retail chains as a whole. Department store sales have fallen 2.4% to $144 billion during the first 11 months of the year.

In a separate report, MasterCard SpendingPulse concluded that November's retail sales rose 2.3% but the strongest sectors were lodging, hardware and restaurants. The group, which calculates aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, determined that U.S. consumers began the Christmas shopping season focused on friends and family rather than buying gifts. Total Thanksgiving weekend retail sales increased only 0.9%, Mastercard SpendingPulse stated, however, the group forecasts a strong late Christmas as total holiday spending should increase 5.5%. The group anticipates that consumer shopping should be much stronger over the weekend of December 13 and the week beginning December 21. 



 
Provenance, Rarity Star at NY Jewelry Auctions

Jewelry sales this week from Sotheby’s and Christie’s in New York exceeded presale estimates and bidding was steady, although not highly competitive.

Sotheby’s sale on Tuesday totaled up $44,151,251 against a $37 million presale estimate with a sale comprised on very wearable jewels and pieces from collections with pedigreed provenance. The top lot of the sale was a platinum-topped gold and diamond necklace that was gifted to Helen Hay when she married Payne Whitney in 1902 — a headline society event of its day. The necklace sold to a European dealer who was in the room, but asked not to be identified, for $3,189,000. Some of the more competitive bidding of the day came about when the collections of cosmetics mogul Estee Lauder and her daughter-in-law, Evelyn H. Lauder, went on the block. A Cartier Tutti Frutti bracelet was the most sought after lot of the afternoon with seven bidders competing for the piece before it sold to a private Asian collector for $2,165,000 setting a world auction record for a Tutti Frutti bracelet by Cartier.

On Wednesday, Christie’s sale was characterized by more large diamonds including the 89.23-carat D/VVS1 pear shaped diamond on a black silk cord pendant. Estimated at $9 million to $12 million, it was the top lot of the day and contributed $11,085,000 to the sales grand total of $66,635,375 against a presale estimate of $55 million. The diamond was purchased by an anonymous buyer who was bidding on the phone. Both sales saw the same pattern of strong prices for great jewelry and rare stones, but there were a number of passes indicating that the market is becoming increasingly selective, yet willing to pay top dollar for top goods, or in some cases just something they really want.



 
U.S. Online Sales Jump

Online U.S. consumer spending rose 15% year on year to $35.499 billion for the November 1 to December 8 time period, according to comScore Inc. Green Monday, which fell on December 8 -- one week after Cyber Monday -- recorded sales of $1.6 billion, up 15% from one year earlier. So far this Christmas season, comScore recorded five days for which online consumer spending topped $1 billion. In addition, the group observed that sales growth has picked up since Thanksgiving, with online spending from desktops up about 18% year on year compared with growth of 13% during most of November.



 
NFC Enabled Pearl Debuts

Galatea: Jewelry by Artist unveiled its near field communication (NFC) empowered Momento Pearl™, defining it as the first cultured pearl to enable shared digital content on a compatible mobile device. Taking smart jewelry to the next level, Galatea implanted an NFC chip inside the pearl, where a tiny computer is powered by induction energy. Using the Galatea app, the user records a message or uploads an audio file to the jewel. By tapping the pearl against an NFC-enabled mobile device, the audio is played and other digital material may be displayed.

Jewelry that interact with a device is where the future of the industry begins, said Momento Pearl inventor and Galatea's founder, Chi Huynh. "A person can 'live' in this pearl forever, as it holds the voice and memories of a loved one." The complete collection of Momento Pearl jewelry includes 29 pendants, 26 earrings and eight rings in 14-karat gold with Tahitian and freshwater pearls.



GENERAL  
 
Descheemaecker to Oversee HRD Temporarily

Serge Couvreur, the CEO of HRD Antwerp, ended his contract through a mutual agreement with the board and Marc Descheemaecker will assist the organization during a transition period. Descheemaecker is an independent member of the HRD Antwerp board and he will oversee the management team on a part-time basis until a new general manager is appointed. He will also act as chairman of the management committee. HRD Antwerp stated that the search process for a new CEO has already begun.

In addition, Pol Van der Steen resigned from the board and agreed to assist HRD Antwerp as a special technical consultant. He will contribute to the development of specialized diamond certification programs, according to the group.



 
Zimbabwe Wins a Round in Belgium Court

The Court of First Instance in Belgium ruled that approximately $45 million in proceeds from a Marange diamond tender that was held in Antwerp three months ago may be released to Zimbabwe, but not before late next week, according to The Herald. Amari Platinum Holdings Ltd. won an order against the Zimbabwe Mining Development Corporation (ZMDC) to seize the diamond revenue as part of a $500 million damage suit related to a canceled mining license. Attorneys for Zimbabwe, however, successful convinced the court that the diamonds and proceeds belonged to various miners in the Marange and not to the ZMDC.

But in an unrelated lawsuit, Dutch farmers are laying claim to the proceeds, too, in their $54 million case against Zimbabwe, for being forced off their properties through illegal government land reform. The court will reportedly weigh the results of the farmers' case on December 18, according to The Herald.



 
Kerala Show Organizers Demand Justice

Organizers of the Kerala Gem & Jewellery Show seek an investigation into why 75 tax authorities raided the two-day business-to-business exhibit on December 7, upsetting exhibitors and attendees, causing chaos and charging exhibitors with infractions. The show, which has been operating since 2008, is not open to the public nor does it conduct sales. Officers confiscated exhibitors' jewelry and started weighing the products for violations.

But in the end, organizers said only three out of 100 exhibitors were found with a minor violation, and even those were the result of miscalculations in the first place. Organizers were adamant that exhibitors and delegates operated within the law, produced required paperwork for exhibiting jewelry and gems, should not have been subjected to a raid and seek justice through an official, impartial inquiry.



MINING  
 
ALROSA Expects Sales to Top $5B

ALROSA's supervisory board approved its 2015 budget and confirmed preliminary results for 2014. ALROSA anticipates having produced 36.1 million carats as of December 31, while total sales of rough and polished diamonds will have exceeded $5 billion. In 2015, ALROSA will continue to focus on its core diamond business and withdraw from nine businesses that are not in scope. ALROSA anticipates that production will improve to 38.2 million carats due, in part, to increased ore mining on the Mir and Udachny underground mines.

ALROSA also expects to reach design capacity at the Internatsionalny underground mine and begin production on the Botuobinskaya and Karpinskogo-1 pipes. Aggregate rough diamond sales in 2015, should reach about 40 million carats, according to ALROSA. The board approved ALROSA's long term development program, which extends to 2023 and anticipates increasing rough diamond production up to 41 million carats.



 
Rough Ruby Auction Achieves $689 Per Carat

Gemfields' rough ruby auction in Singapore totaled $43.3 million for approximately 63,000 carats of predominately high-quality stones that were mined at the Montepuez concession in Mozambique. At $688.64 per carat, the auction realized the highest average price per carat as well as the greatest auction total to date for the gemstone mining and marketing firm. In addition, a 40.23-carat rough ruby -- named "Rhino Ruby" -- sold at this auction, but Gemfields did not disclose the price.

With two ruby sales under its belt, Montepuez auctions have generated $76.8 million in aggregate. Given the focus on higher-quality rubies at this second auction, all lots were offered on an "untreated basis," according to Gemfields, whereas the first auction in June tendered both untreated and treated material, using industry-accepted treatment techniques and full disclosures.



 
NDTC Pays $62M in Royalties

The Namibia Diamond Trading Company (NDTC) paid $8.7 million (NAD 100 million) in diamond dividends to the government, bringing the total payout this year to $61.5 million, according to the New Era newspaper. Namibia's Minister of Mines and Energy, Isak Katali, claimed that the diamond industry represented the largest mineral royalty for the government. In addition, Katali confirmed that progress was being made on creating additional diamond cutting and polishing factories to further expand its beneficiation objectives, the report noted.
 


 
Stellar Secures Funding

Stellar Diamonds entered into a bridging loan agreement for up to $2 million with YA Global Master SPV Ltd. The funding will be available for three years and provides for two initial loan tranches of principal amounts of $250,000 each. The net proceeds of the two tranches will be used to support Stellar's immediate working capital needs and operating expenses before the regular diamond exports and sales from the Baoulé project gets underway. In conjunction with the loan facility, Stellar entered into a $1.57 million (GBP 1 million) standby equity distribution facility with YA Global.



 
Lucara Posts 2015 Outlook

Lucara Diamond Corp. anticipates revenue of between $230 million and $240 million from the sale of 400,000 to 420,000 carats of rough diamonds in 2015, according to the company's outlook. Lucara recorded revenue of $180.5 million in 2013, and for the first nine months of 2014, sales have risen 60% year on year to $195 million. The junior miner expects that building and commissioning Karowe's plant optimization project will be completed in the second quarter of 2015 at a total cost of $55 million; however, with most of the work already completed, Lucara has spent $40 million of that amount this year. Lucara stated that exploration costs in 2015 for two prospecting licenses will be between $7 million and $8 million.



STATS  
 
Israel

  9 months $Mil. %Chng.
Polished exports $4,950 9%
Polished imports $3,200 5%
Net exports $1,750 8%
     
Rough imports $3,030 6%
Rough exports $2,450 9%
Net imports $579 -8%
     
Net diamond account $1,171 17%


 
U.S.A.

  Oct. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $2,224 1% $20,286 5%
Polished exports $1,528 1% $17,923 10%
Net imports $713 1% $2,364 -22%
         
Rough imports $40 21% $502 26%
Rough exports $39 18% $337 39%
Net imports $1   $163 7%
         
Net diamond account $714 1% $2,527 21%


ECONWATCH  
 
Diamond Industry Stock Report

Declines far outnumber gains in industry stocks this week. U.S. shares mainly lower except for Blue Nile (4%) after their PR comparing diamond prices; Far East shares lower, led by ValueMax (-7%). Europe all lower after several weeks of gains and India mainly lower with double-digit declines at C.Mahendra, Winsome and Vaibhav. Mining shares down across the board except for Dominion (+2%) and Firestone (+3%). View the extended stock report.

  Dec. 11 Dec. 4 Chng.  
$1 = Euro 0.807 0.808 -0.001  
$1 = Rupee 62.54 61.92 0.6  
$1 = Israel Shekel 3.92 3.95 -0.03  
$1 = Rand 11.64 11.20 0.44  
$1 = Canadian Dollar 1.15 1.14 0.01  
         
Precious Metals        
Gold $1,225.30 $1,206.10 $19.20  
Platinum $1,236.00 $1,232.00 $4.00  
         
Stock Indexes       Chng.
BSE 27,602.01 28,562.82 -960.81 -3.4%
Dow Jones 17,596.34 17,900.10 -303.76 -1.7%
FTSE 6,461.70 6,679.37 -217.67 -3.3%
Hang Seng 23,312.54 23,832.56 -520.02 -2.2%
S&P 500 2,035.33 2,071.82 -36.49 -1.8%
Yahoo! Jewelry 1,241.67 1,255.79 -14.12 -1.1%


INDIA MARKET REPORT  
 
Polished and Rough Trading Activity

Demand is lower and activity is weak, while asking prices are below sellers' plan. Some improvement in very low-quality, pique goods. The market is surprised by a larger-than-expected De Beers sight; early estimates placing the value at $600 million.  Read the full report.





Advertisements

GIA Lab Reports

Rio Tinto Select

RapNet Inventory

Single Stone and Melee


Advertisements


Diamond Show

RapNet App

Art of Jewellery

Rapaport Magazine

Swim Jewelry Software

Subscribe to Daily News

Advertisements
 
© Copyright 1978-2014 by Martin Rapaport. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are TradeMarks of Martin Rapaport.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.