Rapaport TradeWire - Friday, July 24, 2009
Jul 24, 2009 1:00 AM
Rapaport TradeWire - Friday, July 24, 2009
De Beers raises prices and restricts supply at July sight to estimated $350 mil. Polished market trading remains slow as manufacturers in Israel and Belgium prepare for vacation. BHP Billiton 4Q production +5% to 903,000 cts. Trans Hex July tender generates $16.7 mil. Birks & Mayors 1Q sales -26% to $53.6 mil. Kristall of Smolensk 2008 revenues -28% to $241 mil., net profit -35% to $527,000. China’s June diamond imports +68% to $65.7 mil. Major mining companies create International Diamond Board to steer industry-wide generic marketing. Richard Lennox to head Zale marketing after resigning from De Beers account at JWT.
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"We'd never use a celebrity to advertise. If a brand can't stand on its own two feet, then there is something wrong with it. Our advertising is never a call to action. We are not advertising so we can sell more diamond rings, we are advertising so that when someone decides at some point in the future they want a piece of jewelry, they think of Boodles. We'd never have a sale if something wasn't selling. I'd rather break it up and reuse the components."
Managing director of Boodles Jewellers, U.K.
New Diamond Org. to Step-Up Marketing Efforts
The diamond industry has a new generic marketing group: The International Diamond Board (IDB). The group promises to create and sustain strong consumer demand for diamonds through effective category marketing. IDB is in the process of recruiting a chief executive. Majors involved in the group include De Beers, Rio Tinto, BHP Billiton, ALROSA and Harry Winston. IDB was initiated at the 2008 St. Petersburg Forum.
Canada, Japan Report Jewelry Sales Declines
Canada's retail sales rose 1.2 percent to $34 billion in May; however, sales for the jewelry category fell 0.7 percent, representing the fourth consecutive monthly decrease. Japan's jewelry sales have slid 19 percent during the first six months of 2009, with overall department store sales falling 11 percent. Japan's six-month sales decline at department stores was a new record since tracking began in 1965.
Rapaport Weekly Broadcast
The Diamond Trading Company (DTC) July sight was estimated at $350 million, 18 percent lower than June and less than half the estimate of one year ago. Some sightholders believed that supplies fell short due to production cuts. De Beers updated the industry on its production schedule, as more mining operations resume following extended care and maintenance schedules. View the broadcast.
China’s June Diamond Imports +68%
China’s diamond imports rose 68 percent to $65.7 million in June. Imports by volume increased 63 percent to 70,100 carats.
Retail & Wholesale:
Sales Remain Weak But Retailers Did Report Some Good News
Jewelry retail sales in the U.S. are in a holding pattern, remaining at double-digit declines from one year ago, but there were still positive global developments this week in terms of new launches and retail expansion plans.
Considering the U.S. environment, it was no surprise that Birks & Mayors' sales fell 26 percent to $54 million in the first fiscal quarter and same-store sales in the U.S. also dropped 26 percent. Jewelry sales at Hermes also decreased in its second fiscal quarter; however, sales of leather goods drove revenue higher by 12 percent to $635 million. Sales at Links of London rose 36 percent in 2008 to $102 million, and it is targeting growth of 28 percent this year. Don't count out the Fortunoffs and Mayrocks — they purchased all of their former intellectual property at auction for about $1.8 million and plan to relaunch the Fortunoff brand...eventually...and after a period of heavy-duty market research. A jury in Kentucky sided with jeweler Jim Jackson, deciding he didn't have to refund $800,000 for a diamond necklace that plaintiffs valued at only $500,000. U.S. consumer demand for vintage bridal jewelry has increased this year at estate jeweler Kazanjian & Fogarty, particularly for gold and platinum wedding bands, diamond eternity bands and vintage diamond rings.
Titan will open its largest Tanishq brand diamond store in Chennai, India, and aims to increase the share of its sales from diamond jewelry from 30 to 40 percent. Beards Jewellers in Cheltenham, U.K., is spending $820,000 on a store facelift to add a "touch of Bond Street" glamour. Damas unveiled its Ananyas diamond collection, which includes Tanmania sets, necklaces, pendants and earrings in 18-karat gold. Yael Designs will premiere its Mosaic diamond collection in August featuring black and white diamonds set in white gold. Abbeycrest secured funding to help manage its $3 million debt, and now plans to move upmarket in the U.K. with new branded collections Gorgeous Gold, Fluid and Osare. We've all heard of Cash for Gold USA; well, now they have launched the Cash for Diamonds website to buy consumers' diamonds. They plan to "beat" compeititors' prices by 10 percent.
Kristall, Leviev Report Results; Sri Lanka Approves Deal for Nakshatra
Wholesale trade reports from Russia reveal that Kristall experienced a sales drop of 28 percent in 2008 to $241 million, and net profit dropped 35 percent to $527,000. Leviev's Uralalmaz sales rose 29 percent to $30 million and profits more than doubled to $6.4 million. Leviev's Ruiz Diamonds sales fell 80 percent to $61 million and profit fell 94 percent to $675,580. In Sri Lanka, the Board of Investment approved plans by Nakshatra Overseas to set up a diamond trading facility in a $1.6 million deal. Nakshatra will import rough and cut-and-polished diamonds and precious stones, and re-export them to consuming markets.
Who Is News:
Industry Players on the Move
Industry movers and shakers in the news this week include Richard Lennox, Paul Deasy, Sheldon Kwiat and Stephen Webster. Lennox first made headlines with his departure from JWT on Tuesday, but 24 hours later, Zale announced he had been hired as its new chief marketing officer. Deasy will guest-host "The Gem Insider" show on ShopNBC, where he plans to demystify gemstones in an educational and entertaining format, on July 28 and again on August 18. Kwiat was elected vice chair of YAI/National Institute for People with Disabilities. Webster was commissioned to create a one-of-a-kind diamond mosquito ring for auction to raise funds for Malaria No More U.K.
Rare Diamonds from Argyle, Annenberg Go Up For Auction
Forty-three pink diamonds from the Argyle mine will hit the road as part of a worldwide tender tour. Argyle Diamonds are usually bought by jewelry connoisseurs, private collectors and celebrities. Meanwhile, the Annenberg Diamond is scheduled to be auctioned during Christie's Jewels: The New York Sale on October 21, 2009. The square emerald-cut diamond is described as a 32.01-carat, D color, flawess stone, mounted as a ring and flanked by two pear-shaped diamonds of 1.5 carats and 1.61 carats. The ring, part of the collection of Leonore Annenberg, was designed by David Webb. Christie's estimated its value between $3 million and $5 million.
UK Assay Offices Begin Palladium Hallmark Program
The four U.K. Assay Offices now mark palladium with a legally recognized hallmark. The recognized fineness standards for palladium will be 500 parts per thousand, 950 parts per thousand and 999 parts per thousand. Hallmarking of palladium will become a legal requirement at the beginning of 2010 for items that weigh more than one gram, but until that time it is a voluntary measure in the U.K.
Trip to Africa Proves Memorable for Kardashian, Bush, Crockett
Earlier this month, actress and model Kim Kardashian, professional football player Reggie Bush and former football star Ray Crockett traveled to South Africa and Botswana on behalf of Russell Simmons' Diamond Empowerment Fund™ (D.E.F.). The trip was orchestrated to raise awareness of D.E.F. as well as to educate the celebrities about the group's empowering mission. Simmons founded D.E.F. in December 2007 to raise funds to support education initiatives that help economically disadvantaged people in African nations where diamonds are a natural resource. The celebrities and their family members visited the CIDA City Campus, which is supported by D.E.F., and the Maharishi Institute, and met with students from the African Leadership Academy. They saw firsthand how these D.E.F.-sponsored programs give children the chance to further their education and gain employment once their schooling us completed. The group also visited orphanages for HIV-positive infants.
Two Magazines Celebrate Milestones
Gems & Gemology will celebrate the journal's 75th anniversary with its summer 2009 issue. The Gemological Institute of America (GIA) described the cover story of this issue as a chronicle of the publication's key contributors, landmark articles and gemological milestones through the years.
American Gem Society’s (AGS) Spectra Magazine is going completely digital beginning with the July issue. Spectra’s online presence will be tested with the first few issues, to ensure that AGS members find the new format helpful and resourceful. Spectra began in 1935.
Kerala Jewelry Trade Show KGJS 2009 Runs Nov. 21-23
The Kerala business-to-business (B2B) jewelry trade show, KGJS 2009, will be held from November 21 through 23, 2009, at Le Meridian in Cochin.
GJEPC Introduces Two Initiatives to Promote Trade
The Gem & Jewellery Export Promotion Council (GJEPC) introduced two new programs — the Indian Diamond & Colour Stone Show (IDCS) and the India Diamond Jewellery Promotion (IDJP) — to promote trade in the domestic sector and strengthen India's share of the international marketplace. IDJP begins on the first day of the Navratri festival, September 19, 2009, and lasts through February 14, 2010, and targets 1.5 million rich consumers. The IDCS show takes place August 4 and 5 at the Renaissance Hotel in Mumbai.
Full-Year Production at BHP -4%, Namdeb +3%
BHP Billiton's fiscal fourth quarter production rose 5 percent to 903,000 carats, but for the full year, production fell 4 percent to 3.2 million carats. Meanwhile, Namdeb's production for 2008 rose 2.5 percent to 2.1 million carats. Profits for Namdeb rose 221 percent to $61 million due to strong prices, but that trend has been reversed this year. Namdeb's sales rose 24 percent to $736 million and sales volume fell 12 percent to 1.8 million carats. The average price per carat rose 41 percent.
Two Tenders Net $17M+ in July
Trans Hex sold $16.6 million worth of rough diamonds in July at an average of $973 per carat. The sale helped push Trans Hex's cash resources up 43 percent since March, to $37.4 million. West African Diamonds (WAD) sold 433 carats of rough from its Bomboko mine in Guinea for $50,270 in Antwerp.
Pala's Stake in Rockwell Drops to 9%
Pala Investments Holdings sold another round of Rockwell Diamond shares, representing approximately 3.8 percent of the total number of common shares of Rockwell currently issued and outstanding. This is the fourth such sale since late June. Pala's total ownership of securities in Rockwell now stands at 8.7 percent, down from almost 20 percent one month ago.
De Beers Agrees to 9% Pay Increase
De Beers agreed to a 9 percent pay increase for its unionized workers in South Africa. Union members will will see their minimum monthly wage increase to $617 (ZAR 5,000), while miners in a higher category will receive a minimum of $1,146 (ZAR 9,277).
Minerals, Gems Keep Combatants Going
Human rights groups cite evidence that foriegn and military combatants in the diamond-rich eastern Democratic Republic of the Congo (DRC) are raising cash through illegal mining. The combatants are killing and raping civilians in the process, and without strong U.N. or government intervention, armed conflict in the war-torn region will continue.
For week ending July 23, 2009
| ||July.23||July.16||Chng.|| |
|$1 = Euro||0.704||0.707||-0.003|| |
|$1 = Rupee||48.5||48.6||-0.1|| |
|$1 = Israel Shekel||3.87||3.88||-0.01|| |
|$1 = Rand||7.66||8.06||-0.40|| |
|$1 = Canadian Dollar||1.10||1.12||-0.02|| |
| || || || || |
|Precious Metals|| || || || |
| || || || || |
|Stock Indexes|| || || ||Chng.|
|Dow Jones Avg.||9,068.83||8,711.82||357.01||4.10%|
|S & P 500||976.27||940.74||35.53||3.78%|
|Yahoo! Jewelry Index||810.72||757.71||53.01||7.00%|
| || || || || |
|USA|| || || || |
|Birks & Mayors||$0.40||$0.52||-$0.12||-23.08%|
|Blue Nile ||$47.62||$44.03||$3.59||8.15%|
|Charles & Colvard ||$0.39||$0.39||$0.00||0.00%|
|DGSE Companies, Inc.||$0.91||$0.95||-$0.04||-4.21%|
|Lazare Kaplan ||$2.50||$2.68||-$0.18||-6.72%|
| || || || || |
|EUROPE|| || || || |
|Pinault P-R SA||€65.50||€59.58||€5.92||9.94%|
|Richemont SA||CHF 26.00||CHF 23.92||CHF 2.08||8.70%|
|Swatch Group||CHF 184.70||CHF 170.00||CHF 14.70||8.65%|
|Theo Fennell (pence)||47.50||46.65||0.85||1.82%|
| || || || || |
|INDIA (rupee)|| || || || |
|Ren. Jewellery ||40.55||38.95||1.60||4.11%|
| || || || || |
|NEW ZEALAND|| || || || |
|Michael Hill||NZD 0.67||NZD 0.64||NZD 0.03||4.69%|
| || || || || |
|MINING STOCKS|| || || || |
|(pence unless noted)|| || || || |
|USA|| || || || |
|CANADA|| || || || |
|Harry Winston||CAD 5.94||CAD 6.50||-CAD 0.56||-8.62%|
|Mountain Province||CAD 1.65||CAD 1.76||-CAD 0.11||-6.25%|
|Peregrine Diamonds||CAD 0.70||CAD 0.76||-CAD 0.06||-7.89%|
|Rockwell Diamonds||CAD 0.04||CAD 0.04||CAD 0.01||14.29%|
|Shore Gold||CAD 0.50||CAD 0.52||-CAD 0.02||-3.85%|
|Stornoway Diamond||CAD 0.13||CAD 0.14||-CAD 0.01||-3.70%|
|True North Gems||CAD 0.13||CAD 0.14||-CAD 0.01||-3.70%|
|UK (pence)|| || || || |
|Mano River ||6.4||3.8||2.6||70.13%|
|Rio Tinto plc||2,410.0||2,080.5||329.5||15.84%|
INDIA MARKET REPORT:
==== TradeWire Notices And Restrictions ====
|Polished: Local market very slow. The trade is preparing for IIJS and has high expectations.|
|-1 point:||Good demand: +$300 whites.|
|Fair demand: $100-$250 whites; $250-$350 TTLC. |
|-2 point:||Good demand: $325-$375 whites.|
|Fair demand: $100-$250 whites; $300-$350 TTLC.|
|2-7 point:||Good demand: +$300 whites.|
|Fair demand: $100-$225 whites; $300-$400 TTLC.|
|8-18 point:||Good demand: +$400 whites.|
|Fair demand: $200-$350 whites; $350-$450 TTLC.|
|20 points:||Fair demand: +$600 whites.|
|25 points:||Fair demand: +$700 whites.|
|33 points:||Fair demand: +$900 whites.|
|50 points:||Good demand: $1000-$1500 & +$2000 whites.|
|Fair demand: $300-$800 whites.|
|75 points:||Good demand: +$2000 whites.|
|1 carat+:||Very good demand: +$2000 whites.|
|Good demand: $800-$1500 whites.|
|-3 point:||Good demand: $300-350 whites.|
|Fair demand: $200-$275 whites.|
|+3 point:||Good demand: $350-$400 whites.|
|Fair demand: $200-$300 whites.|
|+9-18 point:||Good demand: +14 pts $550-$600 whites.|
|20 point:||Fair demand: $700-$750 whites.|
|25 point:||Fair demand: $800-$850 whites.|
|50 point:||Good demand: $1600-$1,800 whites.|
|75 point:||Fair demand: $1,000-$1,200 whites.|
|1 carat+:||Good demand: +$1,500 whites.|
|-6 point: ||Good demand: $400-$500 whites.|
|Fair demand: $250-$350 whites.|
|+7-18 point:||Good demand: $600-$700 & +14 pts $800-$850 whites.|
|Fair demand: $250-$400 whites.|
|20 point:||Fair demand: $900-$1,000 whites.|
|25 point:||Fair demand: $1,100-$1,200 whites.|
|33 point:||Fair demand: $1,300-$1,500 whites.|
|50 point:||Fair demand: $1,600-$1,800 & $600-$700 whites.|
|75 point:||Fair demand: $1,100-$1,400 & $2,600-$2,800 whites.|
|1 carat+: ||Good demand: $300-$600 & +$1,000 whites.|
|Tapers & Baguettes|
|Good demand: $600-$800 +5mm whites. $250-$325|
|2mm-2.5mm whites; $350-$400, 2.5mm-3mm whites;|
| $400-$450 3mm-4mm, $500-$600 4mm –|
| 5mm & $175-$250 +2mm-3mm whites.|
|Rough: Price increases for DTC boxes have considerably reduced trade in the local market.|
|1-5 point:||Good demand: $85- $130 makeables; $100-$200 crystals.|
|Fair demand: $7-$20 & $40-$80 OW TTLB & TTLC.|
|6-20 point:||Good demand: $150-220 crystals; $80-$180 makeables.|
|Fair demand: $40-$50 clivage;|
|Fair demand $50-$100 fancy shapes;|
|$50-$90 OW TTLC & TTLB rounds.|
|21-50 point: ||Good demand: $230-290 makeables; $100-$190 & $240-$320 crystals.|
|Fair demand: $95-$200 rounds; $50- $90 clivage.|
|Fair demand: $70-$180 fancy shapes;|
|Fair demand $20-$40 OW TTLC & TTLB.|
|0.51-1.00 carat: ||Good demand: $160-$320 makeables;|
|$120-$240 & $270-$440 crystals.|
|Fair demand: $70-$100 makeables; $40-$70 clivage;|
|Fair demand $50-$100 fancy shapes;|
|Fair demand $60-$90 OW TTLC & TTLB.|
|1.01-2.00 carat:||Good demand: $230-$600 rounds;|
|Fair demand $140-$180 OW TTLC & TTLB.|
|$90-$130 clivage; $170-$350 all fancy shapes.|
|2.01-3.00 carat:||Good demand: $250-$1,100 makeables; $350-$1,500 crystals|
|Fair demand: $250-$325 clivage; $100-$325 flats & TTLC & TTLB|
|$350-$800 OW & $400-$800 fancy shapes.|
|5.00 carat+: ||Good demand: $1,000+ makeables, crystals & all fancy shapes till L color.|
|Mixed Lot:||Good demand: $2-$30.|
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