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Rapaport TradeWire April 21, 2016
Apr 21, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
April 21, 2016
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Polished trading
quiet. Suppliers refusing low offers for better-quality RapSpec A2 diamonds.
Manufacturing profit declining with high rough prices and weak polished demand.
Rising expectations for U.S. demand as Dow surpasses 18,000. De Beers 1Q
production -10% to 6.9M cts., sales -10% to 7.6M cts. ALROSA 1Q production -2%
to 8.2M cts., sales +34% to 12.1M cts. Sotheby’s NY sells $30M (71% by lot) but
Shirley Temple 9.54 ct. blue diamond fails to sell. Israel 1Q polished exports
-17% to $1.4B. Israeli police probing Hanan Abramovici over $60-65M owed to
bourse members. THE RAPAPORT PRICE LIST WILL NOT
BE PUBLISHED ON APRIL 29 DUE TO THE JEWISH HOLIDAY OF PASSOVER.
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| Diamonds |
1,163,906 |
| Value |
$8,004,379,054 |
| Carats |
1,273,158 |
| Average Discount |
-28.36% |
www.rapnet.com
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| 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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Get Current Price List | Subscribe to Rapaport | Join RapNet |
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QUOTE OF THE WEEK
The Israel Diamond Exchange board of directors will show zero tolerance to anyone who brings harm to other bourse members.
IDE managing director Eli Avidar commenting on an investigation into tens of millions of dollars owed to traders by Hanan Abramovici Diamonds Ltd
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MARKETS
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United
States:
Quiet polished
trading with many New York dealers taking vacation during next week’s Passover
holiday. Buyer’s market developing as suppliers reduce prices on unwanted
excess inventory...
Belgium: Confidence low and
trading slow. Dealers focused on filling orders with very little buying for
inventory. Steady demand for pointer sizes and 1 to 2 ct., G-J, VS-SI diamonds...
Israel: Sentiment weak with
default of estimated $60-65M owed to the trade by Hanan Abramovici. Trade is
concerned bankruptcies may follow. Polished trading slow. Big-stone demand weak
with limited selective orders...
India:
Trading is relatively
slow and the market is expected to be quiet through April-May. Weak domestic
demand resulting from jewelers’ strike impacting cash flows in the diamond
sector...
Hong
Kong: Polished trading stable,
continuing momentum since the March show. Concern about softening prices and
weak big-stone demand. Steady demand for 0.30 to 1 ct., D-J, VS-SI, 3X diamonds...
Click here for deeper analysis
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INDUSTRY
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Police, Israel Bourse Probe Trader’s Debts
The Israel Diamond Exchange
(IDE) said it is investigating complaints from “several” bourse members that a
cash-strapped trader owes them tens of millions of dollars.
Hanan Abramovici Diamonds Ltd. owes the money
for goods it bought from traders, the IDE said. Israel’s business daily Globes reported $60 million to $65
million worth of diamonds are involved and “up to a dozen” gem companies could
potentially go bankrupt as a result.
A spokesperson for the Israeli police said it is
investigating the case.
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India U-Turns on Koh-i-Noor
India’s culture ministry said it will make every effort to bring back the 105.6-carat Koh-i-Noor diamond, days after the nation’s solicitor-general stated it should stop claiming it, The Guardian reported.
Solicitor-General Ranjit Kumar told the nation’s Supreme Court April 18 India should give up its claim to the gem, part of Britain’s crown jewels for more than 100 years, because it was “neither stolen nor forcibly taken by British rulers."
But, on April 19, India’s culture ministry issued a statement saying it was yet to make its position known, and that India’s government would make all possible efforts to bring back the diamond, according to the report.
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Israel’s Polished Exports -17% in 1Q
Israel’s polished-diamond
exports dived 17% to $1.44 billion in the first quarter.
In volume terms, polished exports dropped 15% to
528,310 carats, resulting in a 2.1% decline in the average price to $2,720 per
carat.
Polished exports to the U.S., after returns, slid
21% to $499.2 million over January to March, according to data compiled by the
Ministry of Industry, Trade and Labor.
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GHI Gemological Laboratory Reports to be Listed on RapNet
GHI Gemological Laboratory said its diamond reports will be listed on RapNet – Rapaport’s Diamond Trading Network, as the lab expands its presence in the marketplace.
Diamonds with GHI reports have been available in U.S. retail stores and online since 2015, according to the company, which has labs in New York, Los Angeles and Miami. GHI labs specialize in identifying and evaluating loose white diamonds and white-diamond jewelry.
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RETAIL & WHOLESALE
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Shirley Temple’s Blue Diamond Unsold at Auction
A 9.54-carat fancy deep blue diamond once owned by
entertainer and diplomat Shirley Temple failed to sell at Sotheby’s
auction in New York.
“Unfortunately, tonight wasn’t its night in the salesroom, but we remain fully
confident that it will find a buyer,” Sotheby’s said.
The gem, estimated at $25 million to $35 million, led the
Magnificent Jewels sale, which fetched $29.9 million in total, with 71% sold by
lot.
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‘Jubilee Ruby’ Fetches $14M at Christie’s New York
A 15.99-carat Burmese ruby sold for $14.2 million at Christie’s New York Magnificent Jewels auction in New York on April 20.
The oval-shaped stone within a circular-cut diamond and polished gold surround, known as the ‘Jubilee Ruby,’ fetched $885,866 per carat. The item, which was estimated at $12 million to $15 million, was the highlight of the auction. The auction realized a total of $57 million.
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Luk Fook’s 4Q Same-Store Sales -27%
Luk Fook reported same-store retail sales slumped 27% in the fourth fiscal quarter because of “sluggish” consumer sentiment
in Greater China.
Revenue from Hong Kong and Macau dived 28% in
the three months that ended March 31. Sales from mainland China fell
at a slower pace, sliding 1%, as a 4% increase in gem-set jewelry revenue
reduced the speed of decline.
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Richemont Veteran Joins Hearts on Fire
Hearts On Fire has appointed Stephane Barraque, a former
executive at Richemont and LVMH, to a newly-created role of
global chief revenue officer.
Barraque is tasked with developing the diamond brand, owned by Chow Tai Fook,
and making it more global. He will also be responsible for managing the brand’s
sales team and its retail stores.
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Singapore Retailer Joins World Diamond Mark Scheme
Luvenus Jewellery has become
Singapore’s first retail jeweler to join the World Diamond Mark’s Authorized
Diamond Dealer program.
Displaying the seal in four of the company’s
retail shops will enhance consumer confidence and potentially improve sales,
according to Parthiban Murugaiyan, managing director of Luvenus.
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MINING
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De Beers Reduces 1Q Output by 10%
De Beers diamond production slid 10% to 6.9 million carats in the first quarter as the miner reduced output in response to market conditions.
Production from Debswana, a joint venture with the Botswanan government, fell 5% to 5.3 million carats in the three months to March 31.
Consolidated sales by volume dropped 10% to 7.6 million carats, reflecting one fewer sight in the quarter compared with a year ago.
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ALROSA’s 1Q Sales Rise, Production Slips 2%
ALROSA’s rough diamond sales jumped an estimated 16% in value terms during the first quarter.
The miner reported it sold “at least” $1.3 billion worth of rough in the three
months to March 31, compared with $1.1 billion a year earlier, according to Rapaport
News estimates.
The company reduced first-quarter production by 2.3% to 8.2 million
carats, in line with its stated strategy to reduce inventory accumulated
last year.
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Rio Tinto’s 1Q Diamond Output Jumps
Rio Tinto reported first-quarter diamond production jumped
10% to 4.5 million carats because of higher mining rates and availability of a
bigger ore stockpile at its Diavik mine.
The miner recovered 1.1 million carats from its 60% owned
Diavik mine in Canada’s Northwest Territories, a surge of 26%. Production from the
company’s Argyle mine in Western Australia rose 5% to 3.4 million carats.
Dominion Diamond Corporation,
Rio Tinto’s partner in Diavik with a 40% interest, said its share in output from
the mine soared to 754,000 carats.
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Lucara Tender Fetches $51M
Lucara Diamond Corp. sold 10
rough diamonds for $51.3 million at its first exceptional stone tender of the
year.
The miner sold seven diamonds for more than $2 million
each at the tender April 13. The largest was a 296.7-carat, type-IIa stone that
fetched $12.19 million, or $41,008 per carat, while a 245.4-carat diamond went
for $10.49 million, or $42,738 per carat.
All diamonds were sourced from
the company’s Karowe mine in Botswana.
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DiamondCorp Makes $72K From Sale of Two Polished Stones
DiamondCorp said the proceeds from a sale of two polished diamonds, which originated from a 22.1-carat rough stone, show beneficiation creates “significant additional value” for miners.
The company sold the rough – extracted from its Lace mine in South Africa – to its beneficiation joint venture in January. It was manufactured into two “high-quality” diamonds which sold for a combined $261,361.
DiamondCorp's pre-agreed 50% share of the profit from the polished – or $71,979 – lifted its total revenue to $182,529, or $8,256 per carat.
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GENERAL
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VICENZAORO Dubai 2016 Participation Rises
The second edition of the VICENZAORO Dubai jewelry exhibition attracted 10,142 international operators,
buyers and visitors this year, according to organizers.
The exhibition, which ran April 14 to 17, drew
visitors from 107 countries and featured collections from more than 400 brands,
the organizers said. The first edition in 2015 attracted more than 6,000
regional and international visitors from over 110 countries.
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American Gem Society Elects President
The American Gem Society (AGS)
elected Scott Berg as its president, succeeding
Louis Smith.
Berg (pictured), a certified gemologist at Lee Michaels
Fine Jewelry in Baton Rouge, Los Angeles, will hold the position until April
2018.
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AGTA among New Members of U.S. Jewelry Council
The U.S. Jewelry
Council, which works to ensure the industry is
collectively represented at the government and international level, announced
the addition of four new members.
The American Gem Trade Association, Diamond Club
West Coast, the National Association of Jewelry Appraisers and the Silver
Promotion Service have joined the lobby, which now represents 13 associations.
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ECONWATCH
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Diamond Industry Stock Report
A strong week for mining stocks saw many gain in value, led by
Peregrine Diamonds (+15%). U.S. retail was mixed, with Charles &
Colvard (-5.5%) recording the biggest decline. Indian retailers appear
to be recovering following the end of a six-week strike as several gained
this past week, headed by Gitanjali Gems (+9.2%).
View the detailed industry stock report.
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Apr. 21 (12:24 GMT) |
Apr. 14 (10:49 GMT) |
Chng. |
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| $1 = Euro |
0.88 |
0.89 |
-0.01 |
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| $1 = Rupee |
66.28 |
66.59 |
-0.3 |
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| $1 = Israel Shekel |
3.76 |
3.79 |
-0.03 |
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| $1 = Rand |
14.21 |
14.53 |
-0.33 |
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| $1 = Canadian Dollar |
1.26 |
1.28 |
-0.02 |
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| Precious Metals |
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Chng. |
| Gold |
$1,265.75 |
$1,240.18 |
$25.57 |
2.1% |
| Platinum |
$1,036.95 |
$991.00 |
$45.95 |
4.6% |
| Silver |
$17.63 |
$16.12 |
$1.51 |
9.4% |
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| Stock Indexes |
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Chng. |
| BSE |
25,880.38 |
25,626.75 |
253.63 |
1.0% |
| Dow Jones |
18,096.27 |
17,908.28 |
187.99 |
1.0% |
| FTSE |
6,370.76 |
6,360.00 |
10.76 |
0.2% |
| Hang Seng |
21,622.25 |
21,337.81 |
284.44 |
1.3% |
| S&P 500 |
2,102.40 |
2,082.42 |
19.98 |
1.0% |
| Yahoo! Jewelry |
1,128.90 |
1,124.51 |
4.39 |
0.4% |
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INDIA MARKET REPORT
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Polished Trading Activity
Trading is relatively
slow and the market is expected to be quiet through April-May. Weak domestic
demand resulting from jewelers’ strike impacting cash flows in the diamond
sector. Retailers mulling further action to protest 1% jewelry excise duty when
parliament returns next week. Steady demand for GIA-dossiers and 1 ct., G-J,
VS-SI diamonds. Manufacturing levels stabilizing.
Read the Polished Diamond Trading Report
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