Polished diamond imports to the U.S. rose 83 percent year over year to $1.8 billion, while polished exports increased by 69 percent to $1.6 billion, a total second only to that of June 2008. Net polished imports totaled $169 million, a significant improvement against the $16 million the country imported one year ago.
U.S. rough imports fell 8 percent year over year to $44 million and rough exports dropped 35 percent to $28 million. Net rough imports stood at $16 million, a 220 percent gain from the $5 million posted one year ago.
During the first half of 2010, the U.S. imported $8.8 billion of polished goods and exported $6.7 billion, yielding net imports of $2.1 billion, an annual increase of 75 percent. Rough imports totaled $266 million, while exports were $150 million, leaving net imports of $117 million, an annual increase of 384 percent.
Israel’s July Polished Diamond Exports Up
Israel’s polished diamond exports rose by 156 percent in July, increasing by 14 percent year over year to $456.4 million in July 2010, according to statistics published by the Central Bureau of Statistics (CBS). The country’s rough exports grew 36 percent year over year to $242.85 million, the data showed.
Total imports of polished and rough combined increased 51 percent to $624 million. Israel’s net diamond account, representing the excess of total exports over total imports, rose to $75 million, compared to the negative $65.4 million posted in July 2009.
During the first seven months of the year, Israel’s polished imports increased by 75 percent year over year to $3.5 billion, while its rough exports rose 88 percent to $1.9 billion. Israel’s total diamond imports were up by 96 percent to $4.3 billion. The net diamond account for the January-through-July period rose to $1 billion from the negative $2.8 billion reported for the same period of last year.
Japan’s Polished Diamond Imports Rise
Japan’s polished diamond imports rose 18 percent year over year to $60.1 million in June 2010, according to data published by Momozawa & Co., based on information obtained from the country’s Customs Bureau at the Ministry of Finance. By volume, polished imports grew 35.4 percent year on year to 212,235 carats as the average price of the diamonds fell 13 percent to $283 per carat. Polished imports rose from all major centers during the month, with imports from India increasing 19 percent year over year to $24.9 million, rising 2 percent to $13 million from Belgium and growing 19 percent to $6.1 million from Israel.
For the first half of the year, Japan’s polished imports increased by 6 percent to $334.5 million, although when measured by volume, they declined 3 percent to 1.132 million carats. The average price of the stones increased 8 percent year over year to $295 per carat through the six-month period.
Botswana’s Diamond Exports Down
Botswana’s diamond exports fell 1 percent year over year to $650.3 million in the second quarter of 2010, according to data published by the Bank of Botswana (BoB). The exports slumped in May and June after posting increases in the previous two quarters. Despite these declines, the country’s diamond exports increased 58 percent year over year to $1.41 billion for the first half of the year.
Sierra Leone’s Rough Exports Gain
Sierra Leone’s rough exports rose 43 percent year on year to $51.4 million during the first six months of 2010, according to a government document cited by Reuters. The country’s deputy minister of mineral resources, Ignosis Koroma, was quoted by the news service as saying that the government was observing an increase in export value now that the diamond markets are picking up again.
BHP Billiton Boosts Diamond Revenues
BHP Billiton reported that revenue from its diamond and specialty products rose 42 percent year on year to $1.2 billion during the fiscal year that ended on June 30, 2010. The company, considered the largest mining group in the world, saw its total revenues rise 5 percent to $52.79 billion and its net profits jump 116 percent to $12.72 billion during the year. BHP Billiton attributed these gains to strong earnings at its Ekati mine in Canada and $43 million in cuts to its diamond segment’s exploration expenses.
In related company news, the company’s marketing manager, Frank Govic, resigned after 12 years to pursue other opportunities. Govic also represented BHP Billiton as a board member of the World Diamond Council (WDC).
Gold Remains Bullish
Jeffrey Nichols, the managing director of American Precious Metals Advisors, expects the price of gold to continue its historic climb of the past two years. In a note written in his capacity as senior economic advisor for Rosland Capital, Nichols said that gold could hit $2,000 an ounce in the next few years, rising to $3,000 an ounce and possibly higher for the metal’s next cyclical peak. He described his view of gold as “perennially bullish” and long term, though he regularly cautions clients to expect “big corrections and volatile markets.” Nichols stated that gold price declines, however sharp, represented opportunities for investors to establish or bolster their physical gold holdings.
A number of factors influenced this long-term assessment, such as the larger-than-expected U.S. federal deficit, an overly optimistic tax revenue projection, slower-than-projected economic activity and the amount of spending that will be necessary to revive the economy.
Anglo’s Sales Up, Profits Down
Diversified mining company Anglo American reported that its revenue rose 35 percent year on year to $15 billion and its net profit fell 31 percent to $2 billion during the first half of 2010. Group operating profits doubled, however, to $4.1 billion and the company’s net debt was $10.9 billion at the close of the first half.
In its report, Anglo America concluded that the global short-term economic outlook has become “more uncertain in recent months” as leading economic indicators have become unfavorable, though China, India, Brazil and other emerging countries are continuing to drive demand for the mining company’s key commodities.
Gem Diamonds’ Profits Dip
Gem Diamonds reported that its revenue fell 11 percent year on year to $103.9 million for the first half that ended on June 30, 2010, while its profits declined 9 percent to $3 million. The price of rough from the company’s Letšeng mine increased steadily during the period, resulting in an average of $1,728 per carat, an increase of 32 percent against last year’s average.
Letšeng generated $70.9 million in diamond sales from the recovery and sale of 245 rough diamonds greater than 10.8 carats, with 35 diamonds achieving prices over $20,000 per carat. Gem Diamonds’ Ellendale mine achieved an average of $2,588 per carat for the fancy yellow diamonds the company sold to Tiffany & Co. and $144 per carat for all other production, which represented annual increases of 3 percent and 182 percent, respectively.
Article from the Rapaport Magazine - September 2010. To subscribe click here.