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Rapaport TradeWire October 27, 2016
Oct 27, 2016 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
October 27, 2016
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Markets quiet with New York, Antwerp
and Israel returning from Jewish holidays and India closing for Diwali
festivals. Polished prices relatively stable since September HK show but
overall demand relatively weak and inventories high. Rough trading active with
percentage increases due to low sales last year. De Beers 3Q sales +77% to 5.3M
cts., production +4% to 6.3M cts. Petra Diamonds 3Q production +30% to 1.1M
cts. Luk Fook 2Q gem-set jewelry same-store sales -14%. India Sept. polished
exports +30% to $2.5B, rough imports +71% to $1.8B.
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| Diamonds |
1,261,205 |
| Value |
$7,934,057,373 |
| Carats |
1,341,614 |
| Average Discount |
-30.61% |
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 diamond market is holding firm with prices on a like-for-like basis matching those realised in the period January to June.
Johan Dippenaar, chief executive officer of Petra Diamonds, on rough prices in the July to September period
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MARKETS
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United
States and Belgium: Trading
quiet as dealers return from Jewish holidays…
Israel:
Market
quiet as traders return from nearly a month of holidays. Better variety of
goods available with improved sales…
India: Market
gearing up for Diwali with businesses closing, reopening Nov. 7-9. Cutting factories
to shut for up to 3 weeks…
Hong
Kong: Market
sentiment low with Hang Seng Index falling and increased political disorder
over the extent of Chinese control…
Click here for deeper analysis
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INDUSTRY
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KP Wants Industry to Fund Civil Society Attendance
Industry members participating in Kimberley Process (KP)
activities will be required to pay twice so that a non-profit group can also
attend, under plans put forward by the KP chair. Anyone from the trade
attending a review visit, mission or meeting at a KP intersession or plenary
will contribute matching funds. The current system is unfair as trade
bodies typically do not contribute towards non-governmental organizations
participating despite having “significant resources,” KP chair Ahmed Bin
Sulayem (pictured) said. |
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India’s Polished Diamond Exports Jump
India’s polished diamond exports rose 30% to $2.5 billion
in September. Polished imports fell 21% to $184.6 million, leaving net polished
exports 38% higher at $2.32 billion. Rough diamond imports leapt 71% to $1.8
billion, while rough exports more than doubled to $155.1 million from $67.3
million a year ago. Net rough imports grew 67% to $1.64 billion. India’s net
diamond account, the difference between net polished exports and net rough
imports, declined 4% to $678 million.
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Swiss Watch Exports Weighed Down by HK Slump
Exports of Swiss watches declined 5.7% to $1.72 billion
(CHF 1.71 billion) in September as shipments to Hong Kong dived 40% – their
steepest drop in 20 months. Exports to the U.S. rose 4.7%, making it the
leading market for the second time this year. Exports of precious metal
watches slid 15%, while orders of timepieces worth $3,013 (CHF 3,000) or more
fell 6%.
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RETAIL & WHOLESALE
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Luk Fook Sales Decline Steepens
Luk Fook’s same-store retail sales accelerated their
quarterly decline to 37% as gold sales plummeted from a high base amid
“sluggish” consumer sentiment. Sales of the yellow metal by the Hong Kong-based
retailer slumped 47% in the second fiscal quarter that ended September 30,
weighed down by the negative base effect of the “small-scale gold rush” a year
ago and the relatively high price this quarter. Gem-set jewelry sales fell 14%.
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Buffett’s Richline Buys Silpada
Richline Group snapped up Silpada Designs, marking the
Warren Buffett-owned jewelry subsidiary’s fourth acquisition this year. The
purchase covers Silpada’s assets, including its brand name, jewelry designs and
all sterling silver and fashion jewelry inventory. The seller of silver jewelry was founded by stay-at-home mothers. Terms of the deal were not
disclosed. |
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MINING
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De Beers Sales Volume Jumps After Market Recovery
De Beers rough diamond sales grew 77% to 5.3 million
carats in the third quarter. The jump reflected improved trading conditions
compared with a slump in demand a year ago due to high stock levels. Production
increased 4% to 6.3 million carats after the miner cut output last year in
response to the weaker trading environment. Production in De Beers Botswanan
joint venture, Debswana, jumped 12%, with output from the Jwaneng mine leaping
47% because of planned maintenance a year ago.
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Petra Diamonds Production Rises 30%
Petra Diamonds’ production grew 30% to 1.1 million in the
first fiscal quarter that ended September 30 because of increased contribution
from “undiluted run-of-mine ore.” Recovery levels were also lifted by
the joint acquisition of the Kimberley mines in January and the
subsequent formation of the Kimberley Ekapa Mining joint venture.
Separately, Petra said four workers were killed in three incidents at its mines
during the quarter, prompting the company to increase safety initiatives.
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Gahcho Kué Mine Yields 50ct. Diamond
Mountain Province will sell a 50.25-carat gem-quality
diamond from the new Gahcho Kué mine in January, the largest stone yet from the
Canadian project. Total output in August and September stood at 198,000 carats,
of which about 97,000 carats belongs to Mountain Province, which owns 49% of
the mine. De Beers holds the remainder. The first open tender of run-of-mine production
will take place in Antwerp in January.
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Lucapa to Sell 172ct. Rough Diamond Next Month
Lucapa Diamond Company said it will offer a 172-carat and
a 104-carat diamond at a sale of goods from the Lulo mine in Angola in
mid-November. Both stones are type-IIa, D-color rough diamonds and were
recovered in September. Separately, a 72-carat, also type-IIa, D-color diamond
will be among the stones on offer at a sale of diamonds recovered by Lulo’s
alluvial mining company Sociedade Mineira Do Lulo. The sale is scheduled for
mid-December.
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ECONWATCH
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Diamond Industry Stock Report
Stornoway Diamond (+11%) led mining stocks over the past two weeks as its Renard mine opened in Canada. Petra Diamonds (+10%) was also boosted by strong production figures. In the U.S., retail stocks were mostly lower, the declines headed by Birks Group (-9.1%). European luxury stocks rose, led by Kering (+8.1%) on impressive sales results.
View the detailed industry stock report
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Oct 27 (11:17 GMT) |
Oct 13 (11:03 GMT) |
Chng. |
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| $1 = Euro |
0.92 |
0.91 |
0.01 |
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| $1 = Rupee |
66.86 |
66.90 |
-0.04 |
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| $1 = Israel Shekel |
3.84 |
3.81 |
0.03 |
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| $1 = Rand |
13.91 |
14.33 |
-0.42 |
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| $1 = Canadian Dollar |
1.34 |
1.32 |
0.01 |
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| Precious Metals |
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Chng. |
| Gold |
$1,269.50 |
$1,259.17 |
$10.33 |
0.8% |
| Platinum |
$967.96 |
$942.30 |
$25.66 |
2.7% |
| Silver |
$17.68 |
$17.55 |
$0.13 |
0.7% |
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| Stock Indexes |
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Chng. |
| BSE |
27,915.90 |
27,643.11 |
272.79 |
1.0% |
| Dow Jones |
18,199.33 |
18,144.20 |
55.13 |
0.3% |
| FTSE |
6,956.16 |
6,974.67 |
-18.51 |
-0.3% |
| Hang Seng |
23,132.35 |
23,031.30 |
101.05 |
0.4% |
| S&P 500 |
2,139.43 |
2,139.18 |
0.25 |
0.0% |
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INDIA MARKET REPORT
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Polished Trading Activity
Market
gearing up for Diwali with businesses closing, reopening Nov. 7-9. Cutting
factories to shut for up to 3 weeks. Trading slow. Weak demand and growing
inventories putting prices under pressure. Rough flooding market as Sept.
imports grow 71% amid miners’ higher production and sales.
Read the Polished Diamond Trading Report |
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