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Rapaport TradeWire March 30, 2017
Mar 30, 2017 6:00 PM
By Rapaport
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Rapaport Weekly Market Comment
March 30, 2017
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Polished
market stable, but positive momentum has slowed. Big-stone demand restrained.
Shortage of better-quality goods as high-end consumers seek rare, unique
pieces. Lower visitor traffic and fewer exhibitors at Baselworld reflect
cautious Swiss watch industry. Brands offering vintage designs and lower price
points are competing with smart watches. De Beers reduces 2017 sightholder
ITOs, allocating more supply to beneficiation and government partners. Dominion
to assess potential acquisition offers. Chow Sang Sang 2016 revenue -16% to
$2.1B, profit -34% to $96M. Signet, United Laboratories to work with Diamond
Producers Association to test synthetics-detection machines. |
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| Diamonds |
1,241,968 |
| Value |
$7,624,350,208 |
| Carats |
1,340,469 |
| Average Discount |
-29.96% |
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
When you talk to investors about the thousands of different categories of diamonds, you see their eyes glaze over. It’s just too complicated.
Clifford Elphick, CEO of Gem Diamonds, in an interview with Bloomberg.
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MARKETS
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United
States: Polished trading stable. Optimism from Hong Kong
show, diminishing with trading expected to slow in April during Passover and
Easter spring break…
Belgium: Sentiment weaker amid reports of cautious trading
at Basel show. Buyers are selective, filling specific orders and avoiding large
inventory purchases…
Israel:
Polished trading slow
after March show season. Very few dealers in the bourse, with Israeli buyers
looking for goods in India and suppliers selling in New York and Hong Kong
before the Passover break (April 11 to 18)…
India: Steady trading, with US and Israeli dealers looking
for goods in Mumbai. Manufacturers holding prices firm for new RapSpec A2+
production…
Hong
Kong: The market is stable, with consistent demand for
0.30 to 1.10-carat, G-J, VVS2-SI2 diamonds.Some wholesalers still
filling orders from Hong Kong show…
Click here for deeper analysis |
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INDUSTRY
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De Beers Cuts Sightholder Allocations
De Beers has reduced the supply of rough diamonds it will be
offering sightholders in the coming year, as it fulfills its commitment to
support diamond manufacturing in Namibia. The company signed an agreement with
the Namibian government last year, committing to allocate 15% of its Namibia
production to state-owned company Namdia, which will conduct independent
auction sales on behalf of the government. As a result, the company is
predicting a lower available supply for sightholders in the upcoming intention to
offer (ITO) period starting in April.
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Signet Setting Quality Benchmark for Synthetics Detectors
Signet Jewelers has been working with product-testing firm
United Laboratories (UL) to open a testing facility for synthetic-diamond
detectors, so its suppliers can adequately discern natural from lab-grown
diamonds. It will use devices from the International Institute of Diamond
Grading & Research (IIDGR), the Gemological Institute of America (GIA), and
HRD Antwerp to form a benchmark, and it plans to assess machines from
additional manufacturers in the future. The Diamond Producers Association (DPA)
has been working on the same project. |
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Nanotechnology Used to Trace Emeralds to Source
Gübelin Gem Lab is using nanotechnology to trace the origin
of emeralds by applying DNA-based nanoparticles to rough stones at the mine.
The imprint, which is small enough not to affect a stone’s grading properties,
is designed to survive all production stages and can be decoded at any point in
the journey from mine to jewelry, the Switzerland-based laboratory said. |
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Israel Bourse Slices $3M off Expenses
The Israel Diamond Exchange (IDE) has reduced membership
fees for 200 companies after a cost-cutting program resulted in $2.8 million
(ILS 10 million) in annual savings. The bourse has extended its bursary
scheme – which entails a 50% subsidy for companies that cannot afford the full
membership sum – so that a total of 400 firms will now receive the discount,
IDE president Yoram Dvash announced. |
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RETAIL & WHOLESALE
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De Beers, Luk Fook to Co-Brand Grading Reports
De Beers’ polished-grading unit, the International Institute
of Diamond Grading & Research (IIDGR), has partnered with Hong Kong-based
jeweler Luk Fook to produce co-branded diamond reports for the retailer’s
customers. The arrangement will enable Luk Fook to show customers a magnified
image of a diamond’s “light performance pattern,” giving them more information
about the stone, De Beers said. The program launched in Hong Kong
and Macau, and will potentially expand to other parts of Greater China, De
Beers added. |
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Hong Kong Slowdown Hits Chow Sang Sang
Chow Sang Sang saw a sharp drop in sales last year, with
revenue sliding 16% to $2.07 billion (HKD 16.09
billion). Profit slumped 34% to $95.5 million (HKD 742.2 million). Sales
in Hong Kong and Macau fell 23% to $1.11 billion (HKD 8.65 billion), and revenue in mainland China revenue slipped 4.6% to $944.9 million (HKD 7.34 billion). The
company attributed these figures to weak consumer sentiment and a decline in
Hong Kong tourist levels. |
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US Jewelry Stores Continue Growth
Sales at US specialty jewelry stores increased 4% to
$1.84 billion year on year in January, according to the nation’s Census
Bureau. The figure is provisional and not adjusted for seasonal fluctuation,
noted the data agency. The increase came after sales rose 3.7% to a revised
$30.3 billion for the whole of 2016, with a 7% spike in December compared to
the previous year. |
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Rogers & Hollands Launches Cut-Price Stores
Rogers & Hollands Jewelers has introduced a discount
store model, with plans to rebrand two stores in the Chicago area under the
Rogers & Hollands Outlet label in April. All jewelry at the Outlet
locations, which will not be available at any of the chain’s other stores, will
sell for a minimum of 50% off regular retail prices. Watches
will run at a discount of at least 35%.
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MINING
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Dominion Weighing Options After Merger Talk
Dominion Diamond Corporation has set up a team of directors
to evaluate strategies including a potential sale of the company. The
committee will consist of Dominion chairman Jim Gowans (pictured) and fellow board members
Trudy Curran, David Smith and Josef Vejvoda. Dominion recently dismissed an
informal $1.1 billion takeover offer from the Washington Companies, and Reuters reported that the miner had held merger talks with Stornoway Diamond
Corporation.
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Sierra Leone to Tender 709ct. Diamond
A 709.48-carat diamond discovered by a pastor in Sierra
Leone will go up for sale by international tender. The stone, believed to be the 13th-largest rough diamond ever
found, will be on view at the Bank of Sierra Leone until April 5, according to
the Ministry of Mines and Mineral Resources. Potential buyers can bid
after paying a non-refundable $5,000 fee and a $50,000 deposit. The sealed
offers will be opened in front of all bidders on April 6. |
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Rio Tinto Taps New Diavik Mine Chief
Rio Tinto has appointed Patrick Boitumelo as president and
chief operating officer of its subsidiary Diavik Diamond Mines (DDM). Boitumelo
– who will start at the end of July after relocating to Yellowknife, Canada –
was most recently general manager of engineering and projects at Kennecott Utah
Copper in Salt Lake City, Utah. He has extensive senior experience in the
mining industry across a range of asset classes, including diamonds, Rio Tinto
said.
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Lulo Resources Valued at $1,246/ct.
Angola’s Lulo mine contains diamonds that are 54% more
valuable than previously estimated, despite more than a year of resource
depletion, according to mine owner Lucapa Diamond Company. The estimated
price grew to $1,246 per carat as of January 31, based on the latest modeling
assessment, compared with an earlier estimate of $806 per carat in October
2015. A separate assessment of Lucapa’s recently acquired Mothae mine in
Lesotho found that the project contains mineral resources worth an estimated $1,063
per carat. |
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GENERAL
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Ex-De Beers Exec Varda Shine Joins Sarine
Former De Beers executive Varda Shine is set to become an
independent director at Sarine Technologies. Shine previously
served as CEO of the Diamond Trading Company – now De Beers Global Sightholder
Sales – and is currently an independent director of the Mineral Development
Company Botswana. Her appointment is subject to approval at Sarine’s annual
general meeting in Singapore on April 25. The company plans to recruit another
two directors this year. |
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Kiran, Laxmi Dominate GJEPC Awards
Kiran Gems and Laxmi Diamond were the big winners at the 2016
India Gem & Jewellery Awards, which reward the country’s most successful
diamond and jewelry businesses for financial and social-responsibility
achievements. Kiran Gems won four awards, while its marketing
division, Kiran Exports HK Ltd., earned another, and its jewelry manufacturing
arm, Kiran Jewelry, received one as well, according to the Gem & Jewellery
Export Promotion Council (GJEPC), which hosted the ceremony. Laxmi won three awards. |
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ECONWATCH
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Diamond Industry Stock Report
US retail stocks performed well this past week despite questions over the future of brick-and-mortar stores, with Nordstrom (+9.4%) leading the gains. In the Far East, Chow Sang Sang shares rose (+4.2%) despite a slide in sales. Mining stocks were mixed, as speculation of consolidation among Canadian rough producers has introduced a degree of share-price volatility.
View the detailed industry stock report
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Mar 30, 2017 (12:22 GMT) |
Mar 23, 2017 (11:58 GMT) |
Chng. |
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| $1 = Euro |
0.93 |
0.93 |
0.00 |
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| $1 = Rupee |
64.90 |
65.47 |
-0.57 |
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| $1 = Israel Shekel |
3.62 |
3.64 |
-0.02 |
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| $1 = Rand |
12.86 |
12.51 |
0.35 |
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| $1 = Canadian Dollar |
1.33 |
1.33 |
0.00 |
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| Precious Metals |
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Chng. |
| Gold |
$1,250.40 |
$1,248.10 |
$2.30 |
0.2% |
| Platinum |
$957.71 |
$964.00 |
-$6.29 |
-0.7% |
| Silver |
$18.17 |
$17.60 |
$0.57 |
3.2% |
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| Stock Indexes |
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Chng. |
| BSE |
29,647.42 |
29,332.16 |
315.26 |
1.1% |
| Dow Jones |
20,659.32 |
20,661.30 |
-1.98 |
0.0% |
| FTSE |
7,354.17 |
7,325.46 |
28.71 |
0.4% |
| Hang Seng |
24,301.09 |
24,327.70 |
-26.61 |
-0.1% |
| S&P 500 |
2,361.13 |
2,348.45 |
12.68 |
0.5% |
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INDIA MARKET REPORT
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Polished Trading Activity
Steady trading, with US and Israeli dealers looking
for goods in Mumbai. Manufacturers holding prices firm for new RapSpec A2+
production. Suppliers more flexible on older, lower-quality RapSpec A3
diamonds. Good Chinese demand for SI’s. Non-certified “American” piqué goods weaker
than before. Rough trading strong with good 5% to 10% premiums on De Beers
boxes during sight week.
Read the Polished Diamond Trading Report |
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