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Rapaport TradeWire February 16, 2017

Feb 16, 2017 6:00 PM   By Rapaport
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Rapaport TradeWire
RAPAPORT NEWS SERVICE | February 16, 2017 |
Industry Retail General Mining EconWatch India
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Rapaport Weekly Market Comment February 16, 2017

Sentiment improving with rising expectations for important Hong Kong show. Suppliers hoping polished prices will catch up to rough, enabling a return of profits in the diamond manufacturing sector. Steady prices expected at next week’s De Beers sight. ALROSA CEO urges caution in rough market and commits to branded marketing with traceability programs. Stable large-stone and fancy-color diamond demand at International Diamond Week lifts mood in dealer market. Asian Star 3Q sales +7% to $112M, profit -5% to $2.2M. Botswana 2016 rough diamond exports +54% to $4B with projected economic growth +2.9%. NY Diamond Dealers Club signs deal to move into IGT building on 47th St.

RapNet Data: February 16
Diamonds 1,257,653
Value $7,540,766,875
Carats 1,328,851
Average Discount -30.22%

RAPI Chart
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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  Don't buy too many diamonds.

ALROSA president Andrey Zharkov tells an audience of traders at the International Diamond Week in Israel not to purchase more rough than the market can absorb.

United States: Polished trading steady with slight improvement after longer-than-usual post-Christmas lull. Prices firming with shortage of RapSpec A2+ diamonds

Belgium: Market improved slightly after slow start to the year. Dealers hoping momentum will build for Hong Kong International Jewellery Show (Feb. 28)

Israel: Busy International Diamond Week lifts mood in the bourse. Improved foreign buyer presence from previous years

India: Polished trading improving with foreign buyers in Mumbai and local dealers gaining confidence

Hong Kong: Dealers returned from the Chinese New Year break and preparing for Hong Kong show. Steady demand for 1 ct., G-I, VVS-VS, VG+, GIA-graded diamonds and 0.30 to 0.50 ct., D-J, VS2-SI1 goods

Click here for deeper analysis

How to Survive as the Diamond Industry Shrinks

The diamond market is saturated with polished suppliers and goods, and further consolidation is expected this year. Squeezed between rising rough supply and sluggish polished demand, manufacturers are advised to trade with caution...

Click here to continue reading

ALROSA to Start Branded Diamond Marketing

ALROSA is planning to launch marketing programs promoting Russian-mined diamonds, chief executive officer Andrey Zharkov said. The company will run pilot programs in key markets this year, marking the first time it is engaging in direct marketing of its own. The Russian miner has until now has shied away from running its own advertising campaigns.

Steady Activity Lifts Mood at Israel Diamond Week

Sentiment was positive at the Israel Diamond Exchange (IDE) during International Diamond Week. Exhibitors noted steady visitor traffic, with buyers from 30 countries attending. Dealers had a lot of fancy-color diamonds and fancy shapes on display, as well as goods larger than 1 carat, as Israelis have shifted to niche products that improve their margins. The IDE opened a new tender center for rough and polished diamonds during the event.

NY Diamond Dealers Club to Get New Home

The Diamond Dealers Club (DDC) of New York will move to new premises at the International Gem Tower (IGT), enabling more companies to beat sky-high rents by relocating their offices to the trading floor. About 200 to 400 firms currently operate from the existing trading floor on 580 Fifth Avenue out of a total of 1,500 members. The new 17,500-square-foot base on West 47th Street will potentially increase this figure significantly, said David Lasher, managing director of the DDC.

Botswana’s Diamond Exports Rise

Botswana’s rough-diamond exports bounced back last year after a plunge in 2015, helping the country return to economic growth. Outbound shipments of rough increased 54% to $4.02 billion, according to the Bank of Botswana. Fourth-quarter exports leapt to $1 billion from $114.1 million a year earlier. The increase contributed to Botswana’s total exports rising by an estimated 21% in 2016, with the country’s economy growing 2.9% after contracting by 1.7% the previous year. 

Hong Kong Jewelry Market Sees Rare Growth

Hong Kong’s jewelry and luxury sales rose for the first time in more than two years as tourist numbers increased and consumer sentiment improved. Sales of jewelry, watches, clocks and valuable gifts climbed 2.3% year on year to $1.06 billion (HKD 8.19 billion) in December, Hong Kong’s Census and Statistics Department reported. Tourist arrivals to Hong Kong grew 5.4% in December, according to the Hong Kong Tourist Board.

Image: Sputnik Mania

Kering Jewelry Sales Gain in 2016

Luxury group Kering reported a 2% rise in jewelry sales for 2016, attributing the increase to growth in its mid- and lower-range products. Revenue from Kering’s jewelry brands, which include Boucheron, Pomellato, Dodo and Qeelin, reached approximately $450.9 million (EUR 423.5 million) during the year, accounting for 5% of the group’s luxury sales. Watch sales fell 8% to around $360.7 million.

Image: Ruehl_breaker

De Beers Grading Firm Makes Asian Debut

Singapore-based Soo Kee Group will become the first Asian jewelry retailer to offer gemological reports from De Beers grading unit. The partnership will allow Soo Kee to offer bespoke reports from the International Institute of Diamond Grading & Research (IIDGR) for its Lovemarque diamond collection. The Lovemarque line is part of Soo Kee’s bridal-jewelry brand, Love & Co. Each stone will bear a unique IIDGR identification number in addition to a Love & Co. inscription.

Gem Diamonds Puts Ghaghoo Mine on Hold

Gem Diamonds will place the Ghaghoo mine in Botswana on care and maintenance, effective immediately, due to a slump in prices. The average price of rough diamonds extracted from Ghaghoo fell to $142 per carat at the most recent sale in December, from $210 per carat in early 2015, the company said. The miner will continue to manage the site until market conditions improve.

Healthy Demand at First Liqhobong Sale

Firestone Diamonds reported strong demand for higher-quality diamonds at its debut sale of rough from the Liqhobong mine in Lesotho. The February sale in Antwerp fetched $8.1 million from 75,936 carats, or $107 per carat, the miner said. However, weaker market conditions dented prices for smaller stones. Firestone plans to hold one more rough sale by the end of March and then continue with a pattern of two sales every quarter.

Lucapa Rough Sale Yields $4M

Lucapa Diamond Company sold $3.8 million (AUD 4.9 million) of rough diamonds at a recent sale of goods from the Lulo mine in Angola. The parcel of 2,946 carats garnered an average price of $1,276, Lucapa said. A 75-carat stone recovered in November and a 55-carat diamond extracted in December were among the items sold. Lucapa also announced it found a 227-carat rough diamond, the second-largest recovered to date at the mine.

Massive 887ct. Emerald to Headline NY Auction

An 887-carat rough emerald will come under the hammer at auction house Guernsey’s in New York on April 25. Named “La Gloria,” the gem is one of the largest museum-quality emeralds in the world, according to the company. The stone originated in the Muzo mines of Colombia and was collected by Manuel Marcial de Gomar, a veteran of the gemstone industry. The auction will also feature the world’s largest recorded star emerald, Guernsey’s said.

De Grisogono Eyes U.S. Growth with New Deal

De Grisogono, a high-end jeweler that has bought some of the world’s largest rough diamonds, has entered into a partnership for its American operations in an attempt to develop its brand in the U.S. David and Lisa Klein, who own DLK, will take over the management of De Grisogono USA going forward. Geneva-based De Grisogono last year bought the rights to the 813-carat Constellation rough diamond discovered by Lucara Diamond Corporation at the Karowe mine in Botswana.

HRD Antwerp Enters Iran in Middle East Expansion

Diamond-grading group HRD Antwerp will launch an educational program in Iran to expand its presence in the Middle East. HRD will start training certified diamond graders in a debut course in Tehran at the end of April. The move is part of a wider attempt to expand HRD’s operations in the region. The group is planning to open an office in Dubai at the end of February, featuring a drop-off point for diamonds and jewelry.

Asian Star Profit Declines While Sales Grow

Asian Star, a Mumbai-based diamond manufacturer, reported a 5% fall in profit to $2.2 million (INR 145.5 million) in the third fiscal quarter, which ended December 31. Sales jumped 7% to $111.7 million. Revenue from the diamond division grew 6.5% to $96.5 million, while profit before interest and tax slid 14% to $2.7 million. Jewelry revenue grew 21% to $23.3 million.

Diamond Industry Stock Report

U.S. retail stocks gained after sales data showed January was better than expected, with Birks Group (+12%) leading the pack. In Hong Kong, Chow Sang Sang (+2.7%) headed the gains as the Hang Seng index jumped 2.5%. European luxury shares also showed a strong week, led by Richemont (+3%) and Kering (+3%), as the latter reported strong results. Indian stocks mainly declined, while mining was mixed.

View the detailed industry stock report

  Feb 16, 2017 (13:26 GMT) Feb 9, 2017 (12:19 GMT) Chng.  
$1 = Euro 0.94 0.94 0.00  
$1 = Rupee 67.01 66.85 0.16  
$1 = Israel Shekel 3.72 3.75 -0.03  
$1 = Rand 12.98 13.41 -0.43  
$1 = Canadian Dollar 1.30 1.31 -0.01  
Precious Metals       Chng.
Gold $1,238.43 $1,239.28 -$0.85 -0.1%
Platinum $1,015.20 $1,021.00 -$5.80 -0.6%
Silver $18.05 $17.76 $0.29 1.6%
Stock Indexes       Chng.
BSE 28,301.27 28,329.70 -28.43 -0.1%
Dow Jones 20,611.86 20,054.34 557.52 2.8%
FTSE 7,276.94 7,209.11 67.83 0.9%
Hang Seng 24,107.70 23,525.14 582.56 2.5%
S&P 500 2,349.25 2,294.67 54.58 2.4%

Polished Trading Activity

Polished trading improving with foreign buyers in Mumbai and local dealers gaining confidence. Effect of demonetization diminishing but concerns remain that small manufacturers in rural areas are unable to open required bank accounts to resume normal business activity. Large manufacturers raising polished output to fill shortages of select categories. Steady Asian demand for GIA dossiers. Good U.S. demand for piqué (I1 to I3 clarity) diamonds. Rough trading stable ahead of next week’s De Beers sight.

Read the Polished Diamond Trading Report

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