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RAPAPORT NEWS SERVICE | October 13, 2016 |
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Rapaport Weekly Market Comment October 13, 2016

Trading centers quiet over Jewish holidays. U.S. stable with good demand for H-K, SI-I1’s before Christmas selling season. Indian buyers looking for deals with rising expectations for Diwali sales after good monsoon season and lower rupee gold prices (-5%). LVMH 3Q jewelry & watch revenue +2% to $966M. U.S. Aug. net polished imports -1% to $240M. Belgium Sep. polished exports -11% to $1.2B, rough imports +39% to $1.2B. DPA launches generic advertising videos targeting millennials. Rapaport offices will be closed Monday and Tuesday (Oct 17-18) and the Rapaport Price List will not be published next week (Oct. 21) due to Jewish holiday of Succot.

RapNet Data: October 13
Diamonds 1,266,599
Value $7,963,703,562
Carats 1,341,918
Average Discount -30.47%

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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  Maybe we won’t ever get married and maybe we will, but I will spend my future with you.

The line from the DPA's generic marketing video advertisement sums up how it is presenting diamonds to millennials.

United States: Trading sentiment improves for holiday season as DPA launches unconventional video ads focused on millennials who think differently about diamonds and relationships

Belgium: Trading quiet over Jewish holiday period. Dealers focused on filling U.S. pre-season orders

Israel: Short week in Israel due to Yom Kippur holiday. Bourse to close Sunday and Monday (Oct. 16-17) with half-day services over rest of the Succot holiday

India: Market slow with dealers already in festive mode after auspicious Dussehra holiday on Tuesday (Oct. 11). Very few foreign buyers in Mumbai during Jewish holiday period

Hong Kong: Polished market stable but few buyers from trading centers. Steady demand for 0.30 to 0.50 ct., G-J, VS-SI diamonds

Click here for deeper analysis

An Industry Perspective

Rapaport’s Avi Krawitz spoke with newly appointed De Beers CEO Bruce Cleaver at the recent Hong Kong Jewellery & Gem Fair. Cleaver maintains short-term caution for the diamond market but outlines some burgeoning opportunities.

Click here to read the interview

DPA Campaign Focuses on Imperfect Relationships

The Diamond Producers Association (DPA) launched an advertising campaign that breaks with tradition by featuring imperfect relationships and emphasizing “real” and “precious” human connections. The group released two “provocative” video commercials telling the story of couples on life journeys together as it aims to connect with millennials. In contrast with traditional diamond advertising, which often featured glamorous, perfect models, the ads portray the lives of real people and the warts and blemishes of their relationships.

U.S. Polished Imports Rise

U.S. polished diamond imports jumped to the highest level seen in the seasonally slow month of August in three years. Inbound shipments of polished rose 2.4% to $1.66 billion. Polished imports by weight grew 4% to 906,469 carats, while the average price declined 1.5% to $1,833 per carat. Polished diamond exports, meanwhile, increased 3% to $1.38 billion, driving net imports down 0.7% to $280 million.

U.S. Jewelry Industry Returns to Myanmar

Representatives of the U.S. gem and jewelry industry made their first visit to Myanmar since President Barack Obama said he will lift remaining economic sanctions. The delegation was aimed at re-establishing lines of commerce between the two nations. It was led by American Gem Trade Association president Jeffrey Bilgore and chief executive officer Douglas Hucker, Jewelers of America President and CEO David Bonaparte and Jim Shigley, a seasoned gemologist at the Gemological Institute of America.

Belgium’s Rough Trade Soars

Belgium’s rough trading leapt in September as shipments of uncut diamonds continued to outperform polished. Rough exports soared 61% to $1.42 billion and rough imports surged 39% to $1.21 billion. By volume, rough exports jumped 26% to 10.78 million carats. Net rough imports slumped to negative $212.7 million from negative $14 million a year ago. By contrast, polished exports slid 11% to $1.24 billion, while polished imports declined 5% to $1.28 billion.

Sotheby's Expects $3M/ct. for Cartier Blue Diamond

A blue diamond ring will go under the hammer in Geneva next month with an estimated price tag of $15 million to $25 million, or up to $3.1 million per carat. The square emerald-cut, 8.01-carat, fancy vivid blue diamond, named the ‘Sky Blue Diamond,’ will headline Sotheby’s Magnificent Jewels and Noble Jewels auction on November 16. Mounted by Cartier, the diamond also has “excellent” polish and is a type-IIb stone.

LVMH Watch & Jewelry Sales Rise

LVMH Moët Hennessy Louis Vuitton’s revenue from watches and jewelry rose 3% to $2.74 billion (EUR 2.49 billion) in the first nine months of the year as its iconic Bulgari jewelry brand gained market share. “Organic” revenue growth, which assumes a comparable structure and constant exchange rates, was 4%. During the third quarter, watch and jewelry sales grew 3% to $965.8 million, representing a 2% rise in organic revenue.

NRF Predicts U.S. Holiday Sales to Rise

U.S. sales in the upcoming holiday season will increase amid an improvement in jobs and income and stronger consumer sentiment, the National Retail Federation forecast. Revenue is expected to rise 3.6% to $655.8 billion year on year in November and December, beating the 10-year growth average of 2.5%.

Titan Warns of Stagnant Indian Jewelry Demand

India-based Titan Company said demand was weak in the second fiscal quarter as consumers suffered from “consumption fatigue.” The quarter that ended September 30 started off with expectations of improvement because of a “bountiful” monsoon season. But in the end, sales of gold jewelry were sluggish even as studded-jewelry sales beat expectations.

Lulo Mine Production Hits Record Levels

Lucapa Diamond Company said production from its Lulo mine in Angola reached its highest point yet for both total output and average size in the third quarter. The alluvial mine yielded 8,853 carats in the three months that ended September 30 – representing a 154% jump over the same period a year ago. The average weight of diamonds grew an impressive 62% to 1.9 carats per stone as 137 “specials” above 10.8 carats were extracted.

Stornoway to Sell Renard Rough Ahead of Schedule

Stornoway Diamond Corporation will hold the first sale of diamonds from its Renard mine two months earlier than expected. The sale will start November 14 in Antwerp. First ore from the mine in Québec, Canada, reached the diamond plant July 15, with 111,556 carats produced by September 30. Output included 21 “special” stones larger than 10.8 carats.

New Synthetics Detector Works on ‘All’ Jewelry

DRC Techno launched a device for detecting synthetics which it claims is the market’s first machine that sifts out lab-grown diamonds in all types of jewelry. ‘J-Secure’ identifies synthetics from 0.003 carats to 10 carats. The basic model is designed for retail stores, while the ‘J-Secure plus’ machine is for a company’s purchase office. The equipment picks up diamonds created using chemical vapor deposition (CVD) and high pressure-high temperature (HPHT), the two main methods for growing synthetic diamonds.

SimplexDiam Buys All Items in JSN Liquidation Sale

SimplexDiam purchased all the jewelry lots in the liquidation of JSN Jewellery, the wholesale manufacturing division of Canada-based Ben Moss Jewellers. The sale is the “largest” jewelry liquidation this year, with the goods valued at about $4 million at wholesale cost. The company bought more than 8,500 pieces, mostly in commercial price points below $500 at wholesale.

Diamond Industry Stock Report

LVMH (+4.8%) gained this past week on strong sales results, with other Europe-based luxury stocks such as Swatch Group (+7.5%) and Richemont (+7.3%) also strengthening. Gemfields (-7.1%) was the weakest performer of the listed miners, many of which lost value. In the U.S., Birks Group (-11%) headed the declines, while Charles & Colvard (+5.2%) was the strongest performer.

View the detailed industry stock report

  Oct 13 (11:03 GMT) Oct 6 (12:25 GMT) Chng.  
$1 = Euro 0.91 0.89 0.01  
$1 = Rupee 66.90 66.75 0.14  
$1 = Israel Shekel 3.81 3.78 0.03  
$1 = Rand 14.33 13.83 0.50  
$1 = Canadian Dollar 1.32 1.32 0.01  
Precious Metals       Chng.
Gold $1,259.17 $1,261.95 -$2.78 -0.2%
Platinum $942.30 $969.75 -$27.45 -2.8%
Silver $17.55 $17.56 -$0.01 -0.1%
Stock Indexes       Chng.
BSE 27,643.11 28,106.21 -463.10 -1.6%
Dow Jones 18,144.20 18,281.03 -136.83 -0.7%
FTSE 6,974.67 7,031.56 -56.89 -0.8%
Hang Seng 23,031.30 23,952.50 -921.20 -3.8%
S&P 500 2,139.18 2,159.73 -20.55 -1.0%

Polished Trading Activity

Market slow with dealers already in festive mode after auspicious Dussehra holiday on Tuesday (Oct. 11). Very few foreign buyers in Mumbai during Jewish holiday period. Polished inventory rising ahead of Diwali break (Nov. 1). Selective good demand with dealers shifting to lower price points. Steady U.S. demand for 0.20 to 0.70 ct., H-K, SI-I2 diamonds. 1 ct. and larger slower. Melee improving, stars remain weak.

Read the Polished Diamond Trading Report

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