|
|
|
 Home » News » Latest News » News Story
|
|
|
|
|
|
|
|
|
By Avi Krawitz
|
Posted: 01/29/10 12:00
|
|
|
|
|
|
|
RAPAPORT...
Between the Lines
Mining: Letseng Prices Bounce Back
The average price of diamonds sold from the Letseng mine in Lesotho returned to near pre-crisis levels in the fourth quarter, Gem Diamonds reported. The mine is considered the richest mine in the world based on the average price of its stones. The December tender of Letseng diamonds achieved an average of $2,070 per carat. Gem Diamonds’ chief executive officer (CEO), Clifford Elphick, called the recovery of the market and prices throughout 2009 “impressive” but qualified this description with the caveat “even though prices are still below the 2008 highs.” While the improvement has indeed been impressive, we would not want to see the market reach those 2008 highs for some time as the levels reported in the second quarter of 2008 (see graph below) would be truly be inflated. For Letseng, the achievement of a more sustainable level of around $2,000 per carat would signal a healthier market.
Manufacturing/Wholesale: India’s Shift
India’s diamond trade returned to normal levels in the fourth quarter of 2009 as reflected in its rough diamond imports and polished exports. If anything, the global economic downturn illustrated the importance of the domestic market for India’s diamond industry. While the country’s polished exports fell by about one-third in the depths of the crisis (see the table provided below), India’s polished imports fell by far less, maintaining a level ranging between $1.5 billion and $2 billion per quarter throughout 2008 and most of 2009.
As a result, net polished exports — calculated as polished exports less polished imports — fell quite dramatically when the crisis hit. This gives some indication that a larger proportion of India’s polished stones remained in the domestic market. As global economies started to recover in the fourth quarter 2009, the balance tilted back toward exports. However, the country’s polished imports in the fourth quarter still rose to well above average at $2.6 billion, indicating the continued growth of the local market, even if a fair proportion of those diamonds are for re-export.
Retail: Bulgari Stronger at Retail
Bulgari Group reported a 5.1 percent drop in its fourth-quarter revenues to $415 million (EUR 297 million), with its flagship jewelry segment being the only business unit that did not decline. The overall decrease was 2.7 percent when measured at constant exchange rates. Bulgari’s jewelry sales were flat, and up 1.6 percent at constant exchange rates, at $180 million (EUR 129 million) for the period, accounting for 44 percent of its total sales. Watch sales fell 4.5 percent, and 1 percent at constant exchange rates, to $95.9 million (EUR 68.7 million) during the quarter.
The Italian company explained that continued and intensive destocking by third parties in the fourth quarter significantly restricted the performance of its wholesale channel. Group sales at its own retail stores, however, rose 12.1 percent on a constant exchange rate basis — the company did not provide reported-basis calculations for these figures as it did for the former measures. Retail jewelry sales grew 11.4 percent at constant exchange rates, while watch sales were up 20.2 percent during the quarter. At wholesale, the company said it expects destocking to continue within the jewelry and watch segments in 2010, “although to a lesser degree.”
Global Markets
United States: The New York market continues to generate reports of a positive and more consistent flow of business activity compared to last year. Demand is good for round, 0.75- to 1.99-ct., colorless to near colorless, VS2-SI2 stones, particularly for excellent makes. There has been some improvement in the demand for 2.00-ct.+ stones, while the market for 3.00-ct.+, D-F, VS+ categories remains very good. Retailers were encouraged by the news that in January 2009, consumer confidence reached its highest level since September 2008, but remain concerned about the weak economy, which is still apparent in the high level of unemployment.
Belgium: The polished market continues to improve, despite some uncertainty regarding prices. Dealers and manufacturers are hoping that polished prices will increase to follow the rises observed for the price of rough. Furthermore, there is a sense that rough prices will continue to increase, given the shortages on the market.
Israel: The positive mood seen recently has continued and cutters are selling more goods at better prices. However, they are concerned that their trade is being transacted predominantly with local peers as they have encountered some price resistance from overseas buyers. The demand for stones above 3.00-ct. continues to improve and there have been fewer shortages, as well as lower discounts, particularly for D-E, VS1+ goods. There is good demand for 0.30- to 0.50-ct., H-I, VS-SI stones and for the 0.90-, 1.00- and 1.50-ct sizes in all categories, while the demand for 2.00 ct.-stones remains weaker. Demand is being spurred by increases in rough prices, as well as shortages caused by the lack of manufacturing conducted last year.
India: The demand for polished is stable, although there is some resistance from buyers regarding the higher asking prices. Additional rough price increases this month have also caused some uncertainty among polished buyers regarding the right price to offer for goods. There is good demand for melee goods in J+ colors, lower pique and SI+ clarities, as well as strong overall demand for 1.00-ct. sizes, with shortages in the 1.00-ct., G-I categories. The rough market remains active, particularly for categories that yield polished of 0.01-ct. stars and melee and up to 0.20-ct., I+, VS+.
China: The wholesale market remains stable, with preparations for the Chinese New Year now coming to a close. As the buying season concludes, many traders have started taking vacations until after the February 14 holiday. Some foreign buyers are gaining more legal sense about doing business in China following the smuggling bust earlier in the month. The market has received a confidence boost, however, from the strong growth in China’s polished trade that occurred in 2009. Demand is good for 0.30- to 1.10-ct., D-J, VVS-SI, GIA-certified, EX cut stones.
Hong Kong: The market is still quite active to the surprise of some who expected trade to quiet in the weeks leading up to the Chinese New Year. Activity is expected to taper off in the coming weeks, especially as Chinese and Hong Kong factories close for the holiday period. The current demand, however, is being spurred by shortages in the market. There remains a notable difference in prices between Hong Kong and the manufacturing centers, even though the shortage of goods has caused local buyers to make some adjustments to the new prices.
Quote of the Week
“Why join the navy if you can be a pirate?”
- Steve Jobs, the co-founder and chief executive officer (CEO) of Apple Inc.
Note: The full version of this report is sent to RapNet members on a weekly basis. To subscribe go to www.rapnet.com or contact your local Rapaport office.
Disclaimer
©Copyright 2009 by Martin Rapaport. All rights reserved. Rapaport USA Inc, Suite 100 133 E Warm Springs Rd, Las Vegas, Nevada, USA. +1 702 893 9400. This Rapaport Market Report is provided solely for your personal reading pleasure. Nothing published by The Rapaport Group of Companies and contained in this report should be deemed to be considered personalized industry or market advice. Any investment or purchase decisions should only be made after obtaining expert advice. All opinions and estimates contained in this report constitute Rapaport`s considered judgment as of the date of this report , are subject to change without notice and are provided in good faith but without legal responsibility. Thank you for respecting our intellectual property rights.
|
|
|
|
|
|
|
|
|
|
Previous Item
| Back to List |
Next Item
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
© Copyright 1982-2010 by Martin Rapaport. All rights reserved. | Terms of Use | Privacy Policy | Legal Notices
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.
|
|
|
|