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Rapaport TradeWire March 2, 2017
Mar 2, 2017 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
March 2, 2017
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Positive mood at Hong Kong show with steady dealer trading and improving
Chinese demand. Suppliers holding prices firm at the show after Feb. 1 ct. RAPI
-0.3%. U.S. market optimistic
with rising economic sentiment as Dow hits 21,000. Signet shares slump over -10% as jeweler defends against sexual
harassment allegations. Rough market premiums softening after $545M De
Beers sight. U.S. 2016 polished imports flat at $23B,
exports +3% to $18.9B. Hong Kong 2016 polished imports -1% to $17.4B, exports flat
at $13.4B. De Beers unveils new melee screening machine as concerns rise about
undisclosed synthetics. Tiffany
Stevens appointed CEO of Jewelers
Vigilance Committee.
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| Diamonds |
1,276,737 |
| Value |
$7,766,680,402 |
| Carats |
1,373,166 |
| Average Discount |
-30.25% |
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
Confidence is everything in the diamond sector.
Jonathan Kendall, president of De Beers grading subsidiary IIDGR, at the launch of the company’s newest melee screening machine.
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MARKETS
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United
States: Polished trading steady
with dealers watching trends at the Hong Kong show. Buyers looking for goods
but are prepared to wait for the right deal…
Belgium: Antwerp quiet with many
dealers in Hong Kong for the show. Good demand for 0.30 to 2 ct., D-H, VS-SI, RapSpec A2
diamonds…
Israel:
Large delegation of
suppliers at Hong Kong show. Good demand for 0.30 to 2 ct., G-J, VS-SI, RapSpec
A2+ diamonds…
India: Mumbai relatively quiet
with many
dealers in Hong Kong. There are very few foreign buyers in India this week. Sentiment
improving with steady orders for GIA dossiers…
Hong
Kong: Market busy with
improving sentiment during Hong Kong show. Independent Chinese retailers more optimistic than major Hong Kong-based
jewelers…
Click here for deeper analysis |
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RAPAPORT STATEMENTS
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Diamond Trade Hopeful for Polished Price Rebound
Diamond trading this February was slower than in previous
years, with buyers pushing for deeper discounts and suppliers expecting firmer
prices at the Hong Kong show. Sentiment improved, as dealers anticipate U.S.
and Chinese jewelers will start replacing inventory sold during the holiday
seasons. The RapNet Diamond Index (RAPI™) for 1-carat polished diamonds
declined 0.3% in February and was down 1.2% from the beginning of the year.
Click here for the full statement |
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Rapaport Investment Diamond Certificate Sets New Industry Standard for Diamond Quality
The Rapaport Group launched the Rapaport Investment Diamond Certificate at the Hong Kong International Diamond, Gem and Pearl Show this week. The certificate is only available for diamonds that meet stringent Rapaport gemological and investment-grade standards. All diamonds are graded by the Gemological Institute of America (GIA) as well as Rapaport Laboratories. The diamonds must be 0.50 ct. and larger, D-H color, IF-VS2 clarity, and meet Rapaport specifications.
Click here for the full statement |
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INDUSTRY
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Hong Kong Show Sparks Optimism
Sentiment improved with steady diamond trading at the Hong
Kong Diamond, Gem & Pearl show. Dealer trading dominated activity in the
first few days. Jewelers are looking for goods but remain cautious about
building inventory levels after the Chinese New Year signaled a shift toward
lower-price-point items. Dealers are optimistic about polished demand in the
coming months, as the show indicated some pent-up Far East and dealer demand.
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De Beers Unveils New Synthetics Detector
De Beers showcased an updated version of its automated melee
screening machine, the AMS2, in Hong Kong, claiming it could check a wider
range of diamonds for undisclosed synthetics, and at a faster rate. The
AMS2 allows screening of stones as small as 0.003 carats, whereas the
first-generation machine started with 0.01-carat diamonds. The updated machine
is also 10 times faster than its predecessor, can check up to 3,600 stones per
hour, and refers fewer goods for further testing.
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U.S. Polished Diamond Imports Stable
Polished diamond imports to the U.S. were almost flat last
year, recent government data showed. Inbound shipments slipped 0.3% to $23.03
billion in 2016. By volume, imports declined 2.6% to 10.8 million carats, while
the average price increased 2.4% to $2,126 per carat. Polished imports
from India jumped 17% to $8.62 billion, while shipments from Israel dropped 15%
to $7.08 billion. U.S. polished exports climbed 2.9% to $18.85 billion.
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World Diamond Council Names New Head
The World Diamond Council (WDC) appointed Marie-Chantal
Kaninda as executive director, effective March 1. Kaninda (pictured) is replacing Patricia Syvrud, who stepped down February 28. Syvrud had been in the
role since October 2014, when she joined as the council’s first executive
director. Kaninda has more than 20 years’ industry experience at companies
including De Beers, Rio Tinto and Anglo Gold Ashanti. A resident of the
Democratic Republic of Congo, she has chaired the nation’s private-sector
anti-corruption initiative since 2012. |
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RETAIL & WHOLESALE
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Signet Refutes Sexual Harassment Claims
Signet Jewelers’
share price fell more than 10% this week following a media report outlining
alleged claims of sexual harassment and discrimination at its Sterling Jewelers
division. The Washington Post reported that declarations from
roughly 250 women and men were filed as part of a private class-action
arbitration case, alleging sexual harassment during the late 1990s and
2000s at Sterling. The company disputed the allegations, saying the reports
were distorted and inaccurate. |
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J.C. Penney Scales Back Physical Stores
J.C. Penney plans to close 130 to 140 stores this year,
joining the list of major U.S. retailers downsizing their brick-and-mortar
networks in the face of growing competition from ecommerce. The
department-store chain will shut 13% to 14% of its outlets and two distribution
facilities. It will unveil the locations of the closures in mid-March and
expects the stores to shut in the second quarter. The announcement comes after
Macy’s recent decision to close about 14% of its physical outlets over the
coming years.
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Berkshire Hathaway’s Retail Sales Jump
Revenue from Berkshire Hathaway’s retail division, including
three jewelry businesses, grew 14% to $15.09 billion last year, the company
reported. Pre-tax earnings for the unit increased 17% to $659
million in 2016, the Warren Buffett-owned conglomerate said. The rise in sales
reflected the acquisitions of car-dealership group Berkshire Hathaway
Automotive and motorcycle-accessory retailer Detlev Louis Motorrad in 2015. The
retail division also includes jewelers Borsheims, Helzberg and Ben Bridge.
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MINING
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De Beers Sale Points to Steady Rough Demand
De Beers reported rough diamond sales of $545 million in
February as demand remained steady from the beginning of the year. Sightholders
noted an improvement in market conditions for the first two months of the year, after Indian demand slumped in November due to the government’s
demonetization policy. Manufacturing has returned to normal, and the
effect of demonetization has stabilized, explained a Mumbai-based
dealer. Demand for lower-quality, smaller rough, which was particularly
affected by the Indian crisis, rebounded, sightholders observed.
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ALROSA Close to Naming Ivanov President
ALROSA’s shareholders will nominate Sberbank senior vice
president Sergey Ivanov as president of the mining company, according to
Russian press agency TASS. The report cited Russia’s Deputy Prime Minister Yury
Trutnev as naming Ivanov (pictured) when asked who would be
nominated to take over from the departing Andrey Zharkov. The decision over his
successor will be made at the next supervisory-board meeting, TASS cited
Trutnev as saying.
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ALROSA Israel Sale Garners $22M
ALROSA sold $21.8 million of rough and polished diamonds at
its tender in Israel in February. The company sold 105 items at the event,
which took place during Israel’s International Diamond Week at the Ramat Gan
bourse. Lots sold included the round, 80.59-carat, J-color, VS2-clarity
“Star of Viluysk” polished diamond, which was on display at the show. A company
spokesperson declined to say how much the diamond fetched.
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Stornoway Upbeat on Revenue After 2016 Profit
Stornoway Diamond Corporation recorded a profit in 2016 due
to a tax refund, and received a performance boost from the launch of the Renard
mine in October. Net income for the year was $15 million (CAD 19.6 million),
versus a loss of $2.8 million in the comparable period of 2015. A deferred tax
payment of $35.4 million lifted the company’s bottom line, as the company has
yet to record revenue from the mine.
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Trans Hex Rough Sales Fetch $895/ct.
Diamond miner Trans
Hex reported sales of $14.7 million (ZAR 201.1 million) at three recent tenders
of rough stones from its wholly owned operations in South Africa. The sales in
October, December and February fetched an average price of $895 per carat for
16,447 carats, the Cape Town-based company said. Six diamonds sold for more
than $10,000 per carat each, including a 4-carat stone from the Baken mine in
South Africa, which garnered $27,245 per carat.
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GENERAL
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Lucara Diamonds Shine at Oscars
Charlize Theron stole the attention of jewelry observers at
the Academy Awards with a mammoth pair of earrings featuring diamonds from the
Karowe mine in Botswana. The Chopard diamond drop earrings contained a total
weight of 59.9 carats and were cut from a 341.9-carat rough diamond, the Queen
of Kalahari, which Lucara Diamond Corporation extracted from Karowe in April
2015. The miner sold the rough diamond three months later for $20.6 million, or
$60,114 per carat, at an exceptional-stone tender.
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MID Tops Ranking of Israel Diamond Exporters
MID House of Diamonds was the leading Israeli
polished-diamond exporter in 2016 for the second year running, according to the
nation’s diamond controller. The company’s exports declined 3.7% to $184
million. Each of the top five exporters experienced a drop in shipments in
2016, while overall polished exports fell 6% to $4.68 billion, government data
showed. The list of the top 20 exporters excludes about 15 companies that chose
to keep their data confidential.
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Sarine, GGTL Partner to Advance Diamond Grading
Sarine Technologies and GGTL Laboratories have agreed to
work together to research new approaches to diamond grading and authentication.
The two companies will collaborate to address current and future industry
needs, including the detection of synthetic diamonds. GGTL was formed in 2010
through the merger of the Geneva-based GemTechLab and Liechtenstein’s GEMLAB.
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JVC Names Tiffany Stevens as CEO
The Jewelers Vigilance Committee (JVC) has appointed Tiffany
Stevens as president and chief executive officer, replacing Cecilia Gardner,
who has served in the role for 18 years. Stevens (pictured) will
take up the position on March 6. A qualified lawyer, Stevens has
previously held leadership roles at non-profit organizations and foundations
focused on the environment, education and the arts. |
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ECONWATCH
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Diamond Industry Stock Report
U.S. retail stocks gained as President Donald Trump’s Congress speech pushed the Dow Jones Industrial Average to a record 21,000 points. Two notable exceptions were Signet (-12%), whose stock fell following negative media coverage, and J.C. Penney (-11.5%), which announced plans to close stores. Mining stocks generally declined, with Dominion Diamond (-7.5%) dropping for a second consecutive week following recent disappointing sales results.
View the detailed industry stock report
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INDIA MARKET REPORT
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Polished Trading Activity
Mumbai relatively quiet with many dealers
in Hong Kong. There are very few foreign buyers in India this week. Sentiment
improving with steady orders for GIA dossiers. Melee market waking up as
negative impact of demonetization fades. Large manufacturers bullish, investing
in production and sales innovation. Oct.-to-Dec. GDP growth +7.4% despite
demonetization liquidity crunch.
Read the Polished Diamond Trading Report |
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