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Rapaport TradeWire December 31, 2015

Dec 31, 2015 6:00 PM   By Rapaport
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Rapaport TradeWire
RAPAPORT NEWS SERVICE | December 31, 2015 |
Industry Retail General Mining Stats EconWatch India
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Rapaport Weekly Market Comment December 31, 2015

U.S. consumer confidence improves with overall holiday retail sales +7.9%, according to MasterCard SpendingPulse. Mobile and online sales soar. Diamond trade cautious about the Chinese New Year as China-Hong Kong jewelry sales slowed in 2015. RAPI for 1ct. diamonds +1.5% in December as difficult year ends on a positive note. Polished prices supported by shortages rather than rise in demand. Dealers more optimistic but profit concerns continue into 2016. Cutters not willing to raise polished production at current rough prices. The Rapaport Price List is not being published this week (Jan. 1). The Rapaport Group wishes everyone a happy, healthy, ‎prosperous and peaceful New Year.‎

RapNet Data: December 30
Diamonds 1,043,455
Value $7,546,193,201
Carats 1,186,710
Average Discount -28.37%

RAPI Chart
The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

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United States: Polished trading quiet as wholesalers and dealers took vacation between Christmas and New Year. Sentiment improving amid reports of a positive holiday shopping season and some orders for Valentine’s Day...

Belgium: Polished and rough trading very quiet with most dealers on vacation during the Christmas to New Year period. Antwerp bourses are closed until January 4...

Hong Kong: Polished market quiet over Christmas-New Year with many dealers on vacation. Some trading activity to fill orders from Mainland China for the Chinese New Year (Feb. 8)...

India: Positive sentiment in the market. Prices firm due to shortages in RapSpec A2 (3X, none) diamonds while holiday demand was okay. Good U.S. demand for 1ct., G-J, SI2-I2 diamonds...

Israel: Polished trading stable and sentiment continues to improve. Steady demand with shortages supporting prices for RapSpec A2 (3X, none) 0.30-0.90ct., D-J, VS-SI and 1ct., G-J, SI-I2 diamonds... 

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UAE Pact to Supervise Rough Trade

The Ministry of Economy of the United Arab Emirates (UAE) and the Dubai Multi-Commodities Centre (DMCC) have agreed to enhance coordination so that the supervision of the country’s rough diamond trade will be in line with the Kimberley Process (KP) Certification Scheme.

The memorandum of understanding comes as the UAE is about to take chairmanship of the KP on January 1, 2016.

Lazare Kaplan Subject to SEC Action

The Securities and Exchange Commission (SEC) has filed administrative proceedings against Lazare Kaplan International Inc. alleging the New York diamond manufacturing firm failed to submit periodic reports since February 2009.

The SEC will consider whether to suspend trading in the company’s shares for up to 12 months or revoke its registration, according to a filing December 8.

In a response December 21, the company said successfully resolving "material uncertainties" would let the company finalize its financial statements and file the relevant forms.

FTC Seeks Feedback on Jewelry Guides

The Federal Trade Commission (FTC) is seeking comments by April 4, 2016, on the latest draft of proposed changes to the FTC Guides for the Jewelry Industry.

The FTC proposes to revise its guidance on below-threshold alloys, precious metal content of products containing more than one precious metal, surface application of precious metals, lead-glass filled stones, synthetic diamonds, pearl treatments, varietals and misuse of the word ‘gem,’ an FTC statement said.

IDE Appoints Advisory Council, New Board

Yoram Dvash, the new president of the Israel Diamond Exchange (IDE), has set up a Presidents' Consultative Council body comprising leading industry figures.

Former presidents Shmuel Schnitzer, Avi Paz and Yair Sahar, who are all honorary presidents of the IDE, are joined on the new council by Jacob (Kobi) Korn, president of the Israel Diamond Manufacturers Association (IsDMA) and a recent acting president of the IDE; and Moti Ganz, chairman of the Israel Diamond Institute and a former president of IsDMA. They will hold regular meetings to advise Dvash on current matters.

Dvash also appointed a new board and chairs of committees after being elected mid-December. Yehezkel Blum, formerly vice president of the IDE, is now executive vice president, while Shalom Papir has been appointed senior deputy president.

Bank Opens Dubai Diamond Financing Base

The National Bank of Fujairah (NBF) opened its diamond financing office in the Dubai Multi Commodities Centre (DMCC). This comes after the United Arab Emirates bank set up a diamond financing team in April 2015 to fund manufacturers and traders of rough and polished stones.

The unit, based in the Almas Tower, has more than 70 clients, according to the bank. The facility was inaugurated by Ahmed Sultan Bin Sulayem, executive chairman of the DMCC, and senior figures from the NBF and the DMCC.

U.S. Holiday-Season Sales +8%

U.S. retail sales grew 7.9% during the shopping season from Black Friday to Christmas Eve, according to the MasterCard SpendingPulse. The survey tracks sales using cards, cash and checks, excluding automobiles and gasoline purchases.

Ecommerce was among the biggest winners this holiday season, growing about 20% from a year ago, MasterCard Advisors said December 28. According to the company’s recent Omnishopper Guide, 70% of U.S. consumers report doing more research online than before.

Amazon Mobile Shopping Soars this Holiday

Customers shopping on Amazon's mobile app more than doubled this holiday, with nearly 70 percent of the ecommerce giant’s clientele using a mobile device to shop. On Cyber Monday, the first major online shopping day of the season, customers worldwide ordered more than 33 electronics items per second from a mobile device.

The number of members of Amazon Prime, the online retailer’s paid-for service, who shopped via mobile more than doubled in the U.S. this season, Amazon said.

U.S. Jewelry & Watch Sales +3%

U.S. jewelry and watch sales from all retail outlets increased 3.3% year on year to an estimated $6.9 billion in November 2015, according to provisional figures from the Bureau of Economic Analysis.

Jewelry sales in November increased 3.3 per cent year on year to $6.1 billion, according to Rapaport News estimates – beating the October growth rate of 1.9%.

Watch sales rose 3.8% to $811 million year on year. Both categories have seen seven consecutive months of growth after five straight months of decline between December 2014 and April 2015.

Millennials Still Desire Diamonds

Millennials are almost twice as likely as non-millennials to have bought diamond jewelry as a holiday gift, according to a survey carried out by the Diamond Producers Association (DPA).

More than a quarter of men gave diamond jewelry to their partner last holiday season, while this year one third said they planned to, according to the DPA, which polled 400 consumers with annual household income of $75,000 or more in an online survey immediately after the Thanksgiving weekend. The respondents were all married or in a committed relationship, aged 18 to 64, and included a “robust sample” of millennials.

Tiffany Tops Survey of 66 U.S. Digital Brands

Tiffany & Co. topped a ranking of jewelry and watch brands’ digital performance carried out by business intelligence company L2.

The retailer was one of only two brands to receive a “genius” ranking in the 2015 Digital IQ Index: Watches & Jewelry, which benchmarks the online strength of 66 brands in the U.S. The other “genius” brand as per the L2 index was Cartier.

Warm Weather Poses Risk to Canada Ice Road

The world's busiest ice road in Canada’s Northwest Territories is running late because unseasonably warm weather has set back ice formation on a path that gives access to remote diamond mines during the winter, Reuters reported December 24.

The road is still expected to open on schedule late January. However, if current weather patterns continue, there could either be more work for crews trying to build the ice, or the road’s already short period of operation could be cut, the report said.

Paragon Shares Delisted from AIM

Paragon Diamonds was delisted from London’s Alternative Investment Market (AIM) December 29, according to a London Stock Exchange statement of the same date.

The miner had released a statement December 24 saying its shares would be delisted as negotiations over the funding for its mining operations in Lesotho were “unlikely” to reach a “conclusion” by year-end.

The company’s directors worked “tirelessly” to secure financing to bring its Lemphane Kimberlite Pipe Project into production and to enable the miner to explore the Mothae Kimberlite Resource, according to the December 24 statement.

Elvis’ Jewelry Up for Auction

Jewelry and watches owned by Elvis Presley will be among items auctioned at the American singer and actor’s Graceland home in Memphis, Tennessee, this coming week.

“The Auction at Graceland” on January 7 will offer, among a number of pieces, a gold, diamond and rock crystal quartz ring gifted by Elvis to his friend Linda Thompson, estimated at $15,000 to $20,000. Also up for bids is a 14-karat gold necklace gifted to bodyguard Sam Thompson featuring the initials “TCB,” estimated at $12,000 to $15,000, according to Graceland Auctions.

India’s IBJA Plans World Silver Council

The India Bullion and Jewelers Association (IBJA) plans to launch the World Silver Council in the first week of January, Business Standard reported.

The apex body will include representatives from domestic and global silver miners, refiners, traders and users, the report said December 15, citing a senior IBJA official. It will also seek membership from domestic and global players in the silver market and plans to seek ‘council’ status from the Indian government. No such ‘council’ currently exists for the silver industry in India, the newspaper said.

Diamond Industry Stock Report

U.S. retail stocks were generally stable or slightly down this past week since Christmas. Kohl's (+2.1%) headed the pack, while Birks Group (-10%) fell the most. Far East stocks were mixed, with Hong Kong’s Chow Tai Fook (+2.2%) and Luk Fook (+1.9%) gaining and Singapore-listed ValueMax Group (-3.3%) heading the declines. Mining stocks were solid overall, but Anglo American (-9%) continued its recent slide. Indian share prices were mixed, with Lypsa Gems (+11%) heading the gains and Goldiam International (-5%) suffering the biggest decline.

View the detailed industry stock report.

  Dec. 31 (09:30 GMT) Dec. 24 (10:00 GMT) Chng.  
$1 = Euro 0.92 0.91 0.003  
$1 = Rupee 66.22 66.07 0.2  
$1 = Israel Shekel 3.90 3.90 0.01  
$1 = Rand 15.60 15.23 0.37  
$1 = Canadian Dollar 1.39 1.39 0.00  
Precious Metals       Chng.
Gold $1,062.48 $1,073.90 -$11.42 -1.1%
Platinum $871.55 $875.75 -$4.20 -0.5%
Silver $13.88 $14.34 -$0.46 -3.2%
Stock Indexes       Chng.
BSE 26,130.97 25,842.44 288.53 1.1%
Dow Jones 17,603.87 17,602.61 1.26 0.0%
FTSE 6,256.14 6,249.53 6.61 0.1%
Hang Seng 21,914.40 22,138.13 -223.73 -1.0%
S&P 500 2,063.36 2,064.29 -0.93 0.0%
Yahoo! Jewelry 1,005.71 1,007.05 -1.34 -0.1%

Polished Trading Activity

Positive sentiment in the market. Prices firm due to shortages in RapSpec A2 (3X, none) diamonds while holiday demand was okay. Good U.S. demand for 1ct., G-J, SI2-I2 diamond. Steady Chinese demand for 0.30-0.40ct., D-J, VS-SI diamonds. Polished production remains at estimated 30 percent below capacity with tight profitability due to high rough prices. Manufacturers anticipate 5 to 7 percent rough price cut in January. Jewelry retail sales stable but consumer confidence still weak.

Read the Polished Diamond Trading Report


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