Rapaport Magazine

Belgium’s China Connection

Antwerp Market Report

By Marc Goldstein
ICBC is not only a new bank. As far as China is concerned, it is the bank. The recent signing of a memorandum of understanding (MOU) between ICBC, China’s largest bank and the world’s third largest, and the Antwerp World Diamond Centre (AWDC) to finance diamond trade in China from the Antwerp platform is considered a stellar achievement by any measurement. Ari Epstein, chief executive officer (CEO) of AWDC, heralded it as “a very important agreement. It is the first time that a Chinese bank has fully committed itself to finance the diamond trade via Antwerp.” Jiang Jianqing, ICBC’s chairman, added “We firmly believe the Belgian economy will play a predominant role in ending the financial crisis via its diamond industry.”

The details of the agreement itself are still fluid, at least for those who are not on the need-to-know list. Still, people have huge expectations for the deal because a bank of such size will be able to compete directly with the Antwerp Diamond Bank and ABN AMRO in providing financing for the local diamond industry and for its efforts to make inroads into the promising China market. 

Beyond Credit Lines

In confirming the importance of the agreement, sources within AWDC added that there is more to the deal than just the financing of trade. In fact, ICBC has been saying for some time that it was “looking into alternative investments for its 240 million private and corporate clients” and noted that it “has now found such an investment in the AWDC.”

“Diamonds are a special investment product and have a distinct function other investment products cannot match,” Jianqing said in announcing the deal. “The demand for diamonds to celebrate marriages in itself is substantial, not to mention the high demand from the wealthy investor class.”

Had anyone been looking for the best way to resuscitate the battered but potentially lucrative area of investment diamonds, the ICBC bank could just be offering 240 million potential investors. 

To build on the new alliance, the AWDC and a group of diamond manufacturers and traders will embark October 24, 2011, on the first-ever ten-day road trip through China. Once there, under the auspices of ICBC and the Chinese government, the trade representatives will meet with key jewelers in five different Chinese cities. 

New Online Auction Site

An official reception held in the Diamant Kring, the city bourse, on June 21, 2011, welcomed a new online auction house, Lauritz.com Jewellery, to Antwerp. The auction house Lauritz.com is already active in Denmark, Germany and Sweden. Established in 1885 as Lauritz Christensen Auktioner, the company was acquired in 1998 by Bengt Sundstrom, Lauritz chief executive officer (CEO), who developed the company concept as it operates today. The principle is quite simple. The company has 18 brick-and-mortar showrooms open to buyers across northern Europe, which operate in conjunction with an online auction site dedicated to exclusive jewelry, silverware, loose diamonds and watches. The company said it will be drawing from the buyers it already has in approximately 200 countries around the globe.

The company is the second online jewelry seller based in Antwerp. Adin.be has been selling estate jewelry from its Antwerp-based online selling platform for more than a decade.

A very confident Sundstrom claimed in the Flemish-speaking newspaper Gazet van Antwerpen that “Antwerp is proving itself again as being the center of the diamond and jewelry sector.”

Uri Skop and Ilan Fingeret, Lauritz.com’s Antwerp-based managing directors, said the company would be offering an unprecedented opportunity to Antwerp-based jewelry creators. “The designers who are just starting can show their creations in our showroom, and they even get a place where they can introduce themselves, which is a terrific way of drawing attention to their businesses,” they said.

Apart from the jewelry, the most interesting feature of the online auction shop is that it also will attempt to sell loose diamonds. Some diamond manufacturers have lent the company a sampling of loose stones to test the best way to present loose stones online. But the biggest added value for the Antwerp diamond industry is accessibility to a website that’s immediately and totally operational and capable of delivering huge sales from an already developed list of existent clients.

The Marketplace

Polished

• Despite ongoing price increases, .5-pointers, 1-pointers and 2-pointers are incredibly hot in I and better colors. In particular, the VVS and VS categories are seeing even greater demand than SI. Some of this is a reflection of the fact that luxury brands such as Cartier and the Richemont group are doing very well and are easily passing on their increased prices to the end users because very small diamonds are such a small portion of the overall value of their jewelry. 

• 20-pointers to 75-pointers in the same ranges are also very popular.

Rough

• The 12 percent increase in Diamond Trading Company (DTC) prices for its latest sight is testing the price levels that the trade is willing to pay. Expectations are that people will pay because polished is moving very well and there’s a shortage of rough.

Article from the Rapaport Magazine - August 2011. To subscribe click here.

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