Rapaport Weekly Market Comment January 5, 2017
U.S. holiday sales mixed with traditional retailers losing out to online. Diamond trading quiet with many centers on vacation and India still feeling effects of demonetization. Thirty pointers improve but larger sizes decline in 2016, RAPI for 0.30ct. +0.5%, 0.50ct. -1.4%, 1ct. -5%, 3ct. -8.5%. Chinese outlook optimistic. Hong Kong uncertain with Nov. jewelry, watch and luxury sales -14% to $732M. Titan Company reports positive 3Q with Tanishq Diwali sales +40%. Israel 2016 polished exports -6% to $4.7 billion, rough imports +17% to $3.2B.
RapNet Data: January 5
Diamonds 1,221,562
Value $7,537,053,532
Carats 1,323,793
Average Discount -29.99%
www.rapnet.com
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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RAPAPORT ANNOUNCEMENTS
QUOTE OF THE WEEK
The Millennials are very hard to deal with. They come in, and I give them a lesson on diamonds, and then they go online where they don’t have to pay sales tax.
Paul Geiss, owner of Paulo Geiss Jewelers in Charleston, South Carolina.
MARKETS
United States: Holiday reports mixed with overall demand flat to slightly down. Last-minute pickup in sales improved the verdict for season as a whole…
Belgium: Diamond bourses closed for holidays, re-opening Jan. 9. Traders report mixed holiday sales with U.S. and European demand okay but Far East weak…
Israel: Sentiment improved in December following agreement with Tax Authority but trading quiet as companies focus on adapting to new law…
India: Sentiment weak. Holiday sales to U.S. slower than usual with estimates of small decline. Steady demand for 0.30-1.50 ct., VS1-SI2, RapSpec A3 diamonds but D-F, IF weaker…
Hong Kong: Market slow with many traders still on vacation. Retail sentiment weak as November jewelry sales fall following decline in tourist arrivals…
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RAPAPORT STATEMENT
Diamond Prices Decline Amid India Liquidity Crisis
Polished diamond prices softened in December as Indian liquidity dried up due to the government’s demonetization policy eliminating 500 and 1,000 rupee notes. Trading slowed with dealers taking vacation during the holiday period. The RapNet Diamond Index (RAPI™) for 1-carat, RapSpec A3+ diamonds fell 1.3% in December. Sentiment improved despite the slowdown as U.S. consumer confidence rose, but other markets remain cautious with Chinese tourist spending restrained.
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INDUSTRY
India Focuses on Fighting Fraud
India has beefed up its diamond disciplinary capabilities to put a stop to bankrupt traders setting up new companies to escape debts and curb other fraudulent activities. The industry’s new Trade Disciplinary Committee will have more power to target scams than India’s existing diamond trade organizations, according to Sanjay Kothari, the convener of the new panel. It will also have increased ability to ban members from Mumbai’s Bharat Diamond Bourse (BDB).
India Close to Introducing Diamond Futures
The Indian Commodity Exchange (ICEX) is set to launch trading of diamond futures, helping the industry hedge against wild fluctuations in polished prices. Investors will be able to choose from three different monthly contracts for diamonds weighing 0.30-0.49 carats, 0.50-0.69 carats and 1-1.09 carats. The move is expected to introduce a new pool of buyers and help minimize diamond companies’ losses when prices fall, ICEX said. Final approval from the Securities and Exchange Board of India is expected in the coming weeks.
Diamond Shares Sparkle in Bullish 2016
Jewelry and diamond mining stocks gained in 2016, riding the wave of strengthened financial markets as the Dow Jones Industrial Average leapt 13% for the year. Diamond miners were lifted by stronger sales and new mines coming onstream, while online retailer Blue Nile’s shares gained following a surprise private-equity takeover in November. Hong Kong jewelers such as Chow Tai Fook outperformed the Hang Seng Index, but Indian industry stocks fell as the government’s demonetization policy damaged liquidity.
Israels Diamond Trade Slows in 2016
Israel’s polished diamond exports dropped 6.4% to $4.68 billion in 2016, the nation’s Ministry of Economy and Industry reported. Polished imports fell 6% to $3.28 billion, leaving net polished exports 8% lower at $1.39 billion. Trading activity slowed for most of 2016 but sentiment improved toward the end of the year, said Shmuel Mordechai, Israel’s diamond controller. Rough imports rose 17% to $3.25 billion, while rough exports jumped 23% to $2.7 billion.
RETAIL & WHOLESALE
Tourism Lull Hits Hong Kong Jewelry Sales
Hong Kong retail sales of jewelry, watches, clocks and valuable gifts slid 14% to $731.6 million (HKD 5.67 billion) in November, according to provisional data from the Census and Statistics Department. The slump came alongside a decline in tourism, with the Hong Kong Tourism Board reporting visitor numbers fell 2% the same month. Overall retail sales slipped 5.5%, dragged down by lower tourist spending on select big-ticket items, a government spokesperson explained.
India’s Titan Weathers Demonetization Storm
Titan Company’s jewelry sales rose in the third fiscal quarter even as India’s demonetization policy weakened consumer demand. The Mumbai-based retailer’s revenue increased “reasonably” in the three months to December, with its flagship Tanishq brand growing about 15%, Titan said. The Diwali festive season was one of Titan’s best on record, with Tanishq sales soaring 40% over the 30-day period, the company said.
Google to Introduce New Smartwatches
Google will launch two new smartwatches in the first quarter as part of a larger effort to market wearables to consumers, The Verge reported. The flagship devices will use Google’s new Android Wear 2.0 operating system, Jeff Chang, product manager of Android Wear at Google, was cited as saying. The branding of the new timepieces will be linked to the manufacturer, rather than Google, the report claimed, without identifying the watchmaker.
Thieves Nab Jewelry in New Year’s Heist
Three men stole about $6 million of jewelry from a New York wholesaler on New Year’s Eve while mass celebrations took place just a few blocks away at Times Square. Surveillance footage showed the trio entering KGK Holdings at 70 West 36th Street at 10 p.m. using a pry-bar and hammer, according to a report to the New York City Police Department. They stole jewelry from safes and left using a sixth-floor stairwell, with no injuries reported.
MINING
Merlin Magics Up Australia’s Fifth-Largest Diamond
Merlin Diamonds recovered a 35.26-carat brown diamond at its mine in Australia, the fifth-largest diamond in the country’s history. The miner also extracted a 14.6-carat brown diamond and a number of smaller white diamonds, it reported. The discoveries follow the company finding the “first” blue diamond at the Merlin mine in December, although the stone only weighed 0.124 carats. The mine is the source of Australia’s largest diamond, a 104.73-carat white stone.
Israel Scoops 80ct. Diamond for Annual Fair
ALROSA will auction an 80.59-carat polished diamond in Israel next month, with the stone headlining the company’s sale of special-size rough and polished goods. The miner will offer the ‘Star of Viluysk’ diamond as the centerpiece of its tender at the sixth International Diamond Week in Israel from February 13 to 16. ALROSA will also auction 108 boxes of rough diamonds ranging from 11 carats to 199 carats, as well as white and fancy-color polished diamonds starting at 10 carats.
GENERAL
Signature IIJS to Run Alongside WFDB Meet
The Signature IIJS jewelry show will take place in Mumbai from February 6 to 9, coinciding with the World Federation of Diamond Bourses (WFDB) presidents’ meeting. The 10th edition of Signature IIJS will be held at the Bombay Exhibition Centre in Goregaon, a suburb of Mumbai. More than 550 exhibitors and 13,000 visitors are expected to attend, India’s Gem & Jewellery Export Promotion Council (GJEPC) said.
GIA Seeking Diamond Researchers
The Gemological Institute of America (GIA) is calling on qualified researchers to apply for full-time academic research in mineralogy, geology, physics, materials science and other fields related to gemology. The Richard T. Liddicoat Postdoctoral Research Fellowships at the GIA’s California and New York campuses are targeting early-career scientists to conduct creative, independent, publishable research.
India’s IDCA Names 2017 Board
The Indian Diamond & Colorstone Association (IDCA) re-elected Ashok Sancheti of Pioneer Gems as its president for 2017. Voters also backed Rakesh Barmecha of Niru NY to continue as vice president. Prateek Nigam of Oriental Gemco NY was chosen as the new secretary, while Rajeev Pandya of Ashi LLC was elected treasurer and Neeraj Rawat of Rawat Gems was voted in as joint secretary. The executives join a further eight directors on the IDCA’s board for this year.
ECONWATCH
Diamond Industry Stock Report
Indian share prices gained as investors sought bargains following demonetizations downward effect on the market. Jewelry manufacturer Goldiam International (+26%) led industry stocks, while Titan Company (+11%) gained on positive sales figures. Miners and U.S. retailers were mixed, while Far East shares rose, headed by Luk Fook (+5.2%). European retail stocks dipped amid concerns about consumer spending levels.
View the detailed industry stock report
Jan 5, 2017 (13:41 GMT) Dec 29, 2016 (12:24 GMT) Chng.
$1 = Euro 0.95 0.96 -0.01
$1 = Rupee 67.89 68.02 -0.12
$1 = Israel Shekel 3.85 3.84 0.01
$1 = Rand 13.62 13.65 -0.03
$1 = Canadian Dollar 1.33 1.35 -0.02
Precious Metals Chng.
Gold $1,173.83 $1,145.90 $27.93 2.4%
Platinum $958.20 $899.10 $59.10 6.6%
Silver $16.57 $16.08 $0.49 3.0%
Stock Indexes Chng.
BSE 26,878.24 26,366.15 512.09 1.9%
Dow Jones 19,942.16 19,833.68 108.48 0.5%
FTSE 7,200.59 7,101.91 98.68 1.4%
Hang Seng 22,456.69 21,790.91 665.78 3.1%
S&P 500 2,270.75 2,249.92 20.83 0.9%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment January 12, 2017
Diamond demand uncertain as U.S. jewelers report weak holiday sales. Signet disappoints as Nov.-Dec. sales -5% to $1.9B with fewer transactions, higher average price, and technical glitches on ecommerce channel. Mall traffic slow with department stores discounting heavily to attract customers. Macy’s, J.C. Penney jewelry outpaces sluggish overall performance. Rising expectations for Chinese New Year after Chow Tai Fook 3Q retail sales +7% in China, -6% in Hong Kong. Steady rough demand expected at next week’s De Beers sight as manufacturers raise production for 1Q stock replenishment. ALROSA 2016 sales +26% to $4.5B. U.S. Nov. polished imports -2% to $1.6B, exports +25% to $1.7B.
RapNet Data: January 12
Diamonds 1,258,800
Value $7,663,568,584
Carats 1,343,922
Average Discount -29.95%
www.rapnet.com
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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RAPAPORT ANNOUNCEMENTS
January 11-18 Wed-Wed
Rapaport Single Stone Auction
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January 17-25 Tue-Wed
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QUOTE OF THE WEEK
Signet’s holiday faced a perfect storm of retail pressure from jewelry-industry trends, competitor promotions, Sterling ecommerce execution, U.K. macro factors and weak mall traffic.
Nomura analyst Simeon Siegel
MARKETS
United States: Polished market stable as dealers return from Christmas break. Diamond trading expected to improve as jewelers replenish stock sold during holiday period…
Belgium: Trading quiet as dealers return from vacation. Cautious mood after polished prices softened in December and as banks restrict funding to local traders…
Israel: Stable market with steady Far East demand ahead of Chinese New Year season. U.S. demand slow as buyers return from holiday…
India: Sentiment weak. Holiday sales to U.S. slower than usual with estimates of small decline. Steady demand for 0.30-1.50 ct., VS1-SI2, RapSpec A3 diamonds but D-F, IF weaker…
Hong Kong: Diamond trading slow with manufacturers and wholesalers closing for Chinese New Year holiday. Retail sentiment improving ahead of the Jan. 28 festival with growth in mainland China expected from last year’s low base…
FIVE-MINUTE INTERVIEW
Undisclosed Synthetics Reaching Epidemic Levels
Joseph Kuzi, director of Diamond Services, warns that undisclosed synthetics are more widespread than the industry realizes. As technology advances and production of lab-grown diamonds increases, the trade must raise its vigilance about the issue if it is to protect the future of the natural diamond industry, Kuzi emphasized in a recent interview with Rapaport News...
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INDUSTRY
Sarine Sales Jump Indian Liquidity Hurdle
Sarine Technologies expects fourth-quarter revenue grew significantly as sentiment improved in the Indian diamond manufacturing sector. The company projected sales surpassed $18 million during the final three months of 2016, which would imply a 45% jump from a year ago. Sentiment in India was strong during the quarter despite the impact of demonetization on liquidity levels, Sarine explained.
India Approves Diamond-Futures Trading
The Securities and Exchange Board of India (SEBI) gave its in-principle approval to trading in diamond futures. Transactions on the Indian Commodity Exchange (ICEX) are expected to launch in March once certain additional regulatory approvals have been obtained. Investors will be able to trade in three categories of diamond futures: 0.30 carats, 0.50 carats and 1 carat. India’s government gave its go-ahead to the plans in September.
Households Unaware of 80% Rise in Jewelry Value
Vintage jewelry gained more than 80% in value in the past decade, with many owners not realizing how much money they are sitting on, U.K.-based auction house Bonhams said. Jewelry from the Art Deco period in the 1920s and 1930s and pieces from the Belle Epoque era from 1890 to 1915 have appreciated 88% since 2006, the company said, citing Art Market Research. Jewelry from the post-war era jumped 70% in value.
U.S. Diamond Trade Slows in November
U.S. polished diamond imports slipped 2% to $1.59 billion in November, while polished exports grew 25% to $1.7 billion, government data revealed. Rough imports more than doubled to $72.3 million, while exports jumped to $73.2 million from $19.8 million. The net diamond account was negative $107.9 million compared with positive $248.9 million a year ago, as more diamonds left the country than came in during the period.
RETAIL & WHOLESALE
Ecommerce Gains Leave Retail Stores in the Cold
Initial holiday sales data from across the retail sector pointed to a tough season, with department stores reporting declines due to a shift toward online shopping. Macy’s and J.C. Penney both posted revenue drops but noted jewelry sales were relatively strong. Kohl’s holiday sales also fell. Researchers at RetailNext backed up this verdict, reporting bricks-and-mortar sales fell 10%, while ComScore said online sales jumped 12%.
Signet Reports Bleak Holiday Season
Signet Jewelers’ sales fell 5.1% to $1.94 billion in November and December as the company observed overall weakness in the jewelry market. Ecommerce sales slipped 2.4% because enhancements to Signet’s online selling platform failed to cope with the higher levels of holiday traffic. In-store sales were more in line with the mid-single digit decline seen across the jewelry industry over the holiday, the company said. Signet’s same-store sales fell 4.6% during the period.
Richemont Sales Hint at High-End Rebound
Richemont reported sales at its jewelry maisons jumped 9% to $1.86 billion (EUR 1.75 billion) in the third fiscal quarter which included the holiday season. The maisons, which comprise luxury brands Cartier and Van Cleef & Arpels, drove an overall improved performance by the group, while sales at its specialist watchmakers fell 2%. Group revenue advanced 6% to $3.29 billion, with sales in Asia-Pacific rising 10%, while the Americas grew 8% and Europe climbed 3%.
Chow Tai Fook Sales Signal China Recovery
Chow Tai Fook said retail sales in mainland China increased 7% in the third fiscal quarter that ended December 31, while same-store sales advanced 4%. However, revenue from Hong Kong and Macau fell 6% with same-store sales down 2%. Gold sales outperformed gem-set jewelry in both regions as gold prices rose during the period. The results signal a turnaround from the double-digit declines reported in the past two years when the jeweler was hit by a slowdown in Chinas economy and fewer tourist arrivals in Hong Kong.
Weak U.S. Sales Inhibit Michael Hill Growth
Australia-based Michael Hill reported group sales increased 5.7% to $240.3 million (AUD 328.1 million) in the first fiscal half ending December 31, despite its sluggish performance in the U.S. Global same-store sales increased 1%. Sales generated at Michael Hill-branded stores in Australia increased 3%, while revenue in Canada jumped 18%. Sales in New Zealand declined 1.3%. However, U.S. sales slid 5.9% as the company attempts to revive growth there under new regional head Brett Halliday.
MINING
ALROSA Sales Rise as Rough Demand Returns
ALROSA’s diamond sales jumped 26% to $4.49 billion in 2016, reflecting a recovery in the rough market. The increase came despite a slowdown in the final two months when Indias demonetization policy impacted liquidity for small rough diamonds. ALROSAs December sales totaled $176.3 million, with rough revenue of $173 million and polished sales of $3.3 million. This compares with combined sales of $255.2 million recorded in November.
Angola Mine Claims Highest-Value Diamonds
Lucapa Diamond Company claimed its Lulo mine in Angola achieved the highest price per carat for any run-of-mine diamond production in the world in 2016. Sales reached $51 million at an average price of $2,983 per carat, the miner reported. The mine produced 269 ‘special’ rough diamonds, weighing 10.8 carats or more, compared with 86 a year ago. Total diamond output more than doubled to 19,833 carats from 8,394 carats in 2015.
GENERAL
Sotheby’s Combines Luxury Categories
Sotheby’s launched a luxury and lifestyle division uniting its jewelry, watches, wine, cars and ‘experiences’ categories. The auction house appointed seasoned auctioneer Marteen ten Holder managing director of the new unit. Ten Holder (pictured) brings experience in each of the categories to the role. He will move to New York from London, where he was most recently managing director of Sotheby’s operations in Europe, the Middle East, India and Africa.
Dhamani Selected to Retail Argyle Pink Diamonds
Rio Tinto named Dubai-based jeweler Dhamani to its exclusive list of ‘select ateliers’ for Argyle pink diamonds, granting it access to the miner’s supply of rare stones. Dhamani launched a new line of pink-diamond jewelry, the DPINK Collection, which mostly comprise diamonds from Rio Tintos Argyle mine in Australia. ‘Select ateliers’ are companies that Rio Tinto has entrusted with retailing Argyle pink diamonds not sold through Rio Tinto’s main annual tender.
MJSA Raises the Bar for Bespoke Jewelry
Manufacturing Jewelers & Suppliers of America (MJSA) has launched a program to improve the consumer experience when buying custom-made jewelry. The group set up the Council of Custom Jewelers as part of the initiative to advance the art of custom-jewelry design and consumers’ appreciation of it. MJSA will also establish a basic definition of custom jewelry and promote a system for classifying custom-designed projects.
ECONWATCH
Diamond Industry Stock Report
Disappointing U.S. holiday sales prompted heavy losses among retail stocks, with Kohls (-21%) enduring the biggest slide. JCPenney (-17%), Macys (-16%) and Signet (-11%) also fell sharply after sluggish performances during the crucial season. Hong Kong retail gained on improved results from Chow Tai Fook (+6%) and signs of a recovery in the Chinese market. It was also a relatively strong week for European retail stocks as Richemont (+17%) reported promising results.
View the detailed industry stock report
Jan 12, 2017 (12:53 GMT) Jan 5, 2017 (13:41 GMT) Chng.
$1 = Euro 0.94 0.95 -0.01
$1 = Rupee 67.97 67.89 0.08
$1 = Israel Shekel 3.82 3.85 -0.03
$1 = Rand 13.46 13.62 -0.16
$1 = Canadian Dollar 1.31 1.33 -0.02
Precious Metals Chng.
Gold $1,204.73 $1,173.83 $30.90 2.6%
Platinum $986.80 $958.20 $28.60 3.0%
Silver $16.92 $16.57 $0.35 2.1%
Stock Indexes Chng.
BSE 27,247.16 26,878.24 368.92 1.4%
Dow Jones 19,954.28 19,942.16 12.12 0.1%
FTSE 7,285.86 7,200.59 85.27 1.2%
Hang Seng 22,829.02 22,456.69 372.33 1.7%
S&P 500 2,275.32 2,270.75 4.57 0.2%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment January 19, 2017
Sentiment improving as jewelers begin stock replenishment after mediocre holiday season. Independents outperform majors and online takes significant market share from physical stores. China waking up for ‘Year of the Rooster’ with rising expectations for Jan. 28 Golden Week. China doing much better than Hong Kong. Luk Fook 3Q same-store sales -10% with China +5%, Hong Kong -11%. Rough trading steady with continued weakness in lower-quality goods due to India demonetization problems. Price-sensitive buyers moving to HPHT synthetics instead of lower-quality natural diamonds. India Dec. polished exports +23% to $1.2B, rough imports -5% to $1.5B. Richline buys The Aaron Group.
RapNet Data: January 19
Diamonds 1,244,958
Value $7,454,575,039
Carats 1,327,166
Average Discount -30.36%
www.rapnet.com
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.
Get Current Price List | Subscribe to Rapaport | Join RapNet
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January 17-25 Tue-Wed
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February 5-8 Sun-Wed
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February 8-15 Wed-Wed
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QUOTE OF THE WEEK
Whether it was Iceland at the Euros, Leicester City in the Premier League, the West Indies in the T20 World Cup, Sunrisers Hyderabad in the IPL, the Chicago Cubs in the World Series or the Fiji rugby sevens team in the Olympics, it was proven beyond a shadow of a doubt last year that by working together towards a common objective, you can surpass everyone’s expectations of what’s possible.
De Beers CEO Bruce Cleaver urges the industry to work together in a speech to sightholders.
MARKETS
United States: Polished trading improving after quiet holiday period. New York dealers preparing for India Diamond Week in DDC (Jan. 23 to 26)…
Belgium: Steady activity with dealers gaining confidence for 2017. U.S. demand stable, Europe weak. Stable demand for 1 ct., G-J, VS-SI, RapSpec A3+ diamonds. 0.30 ct. to 0.40 ct. improving…
Israel: Trading quiet. Dealers still assessing holiday season as memo goods are slowly returned. Buyers shifting to lower price points with steady U.S. demand for J-K, SI-I1 goods…
India: Trading improving with foreign buyers looking for bargains in Mumbai. Shortages in select categories as fresh post-Diwali supply still in production…
Hong Kong: Dealer market quiet as wholesalers close for the Chinese New Year. Some last-minute orders with steady holiday demand for 0.30 to 1 ct. E-J, VVS-SI RapSpec A2+ diamonds...
INDUSTRY
Diamond Marketing Body Seeks Cash Injection
The Diamond Producers Association (DPA) plans to increase its annual budget to $60 million from $6 million by asking members for bigger contributions, Bloomberg reported. The industry’s marketing body is looking to step up efforts to make diamonds appeal to younger consumers, who are increasingly spending their cash on electronics and restaurants. The DPA will approach members such as De Beers and ALROSA to get them to increase their financial backing, Bloomberg said, citing people familiar with the plans who asked not to be named.
Demonetization Stifles India’s Diamond Imports
India’s rough diamond exports fell 5% to $1.4 billion in December as demonetization damaged local demand, according to data published by the Gem and Jewellery Export Promotion Council. Polished exports rose 23% to $1.48 billion, leaving net polished exports – reflecting the excess of exports over imports – 32% higher at $1.28 million. India’s December net diamond account improved 89% to a deficit of $45 million as total imports exceeded exports.
Richline Acquires The Aaron Group
Richline Group bought jewelry manufacturer The Aaron Group, as the Warren Buffett-owned business continues to drive growth through mergers and acquisitions. The companies did not disclose terms of the deal, which was the fifth acquisition Richline has made in the last 12 months. The Aaron Group, founded in 1950, has grown from its New York roots to a manufacturer with operations in London, Mumbai and China. The takeover will help the company roll out new designs and collections more rapidly, according to Robert Kempler, its president.
RETAIL & WHOLESALE
NRF Reports Some Holiday Cheer
Holiday retail sales rose 4% driven by an accelerated economic recovery even as certain large chain stores reported lower traffic, according to separate reports from the National Retail Federation (NRF) and MasterCard. The NRF said total U.S. sales increased to $658.3 billion in November and December, with online and non-store sales growing 13% to $122.9 billion. MasterCard also estimated total sales increase at 4% during a slightly shorter period over November 1 to December 24, with online sales jumping 19%.
Trump Protests Disrupt Tiffany Holiday Sales
Tiffany & Co. said holiday sales declined 4% to $483 million in the Americas. The drop resulted from weaker consumer spending and post-election protests outside the jeweler’s flagship New York outlet, which neighbors Trump Tower. Access to the Fifth Avenue store was restricted, with sales slumping 14%, contributing to overall lower U.S. sales. Worldwide group sales increased 0.5% to $966 million amid growth in Asia Pacific and Japan.
Forevermark Holiday Sales Outperform Rest of Trade
Forevermark diamond sales in the U.S. jumped 6.4% during the holiday season as product launches and marketing campaigns paid off, De Beers chief executive officer Bruce Cleaver said. Sales of the De Beers-owned brand grew 7.6% in 2016. The figures are based on a representative survey of jewelers that stock Forevermark products. By contrast, total jewelry sales edged up 0.7% in December and increased 0.4% in the full year, according to data from the Mastercard Spending Pulse cited by Cleaver.
China a Bright Spot as Luk Fook Sales Decline
Luk Fook reported same-store sales fell 10% in the third fiscal quarter as a continued decline in its Hong Kong business outweighed improvements in mainland China. Same-store sales slid 11% in Hong Kong versus a 5% increase in mainland China in the three months that ended December 31. The drop in third-quarter sales was slower than that in the previous three months, when same-store sales slumped 37%. The figures only include retail sales at Luk Fook’s self-operated stores.
Birks Holiday Sales Defy U.S. Jewelry Dip
Birks Group reported comparable-store sales grew 11% in a record holiday season for the retailer as the average spend per shopper rose and a greater proportion of store visits translated into purchases. Comparable-store sales jumped 16% in the U.S. and rose 3% in Canada between October 30 and December 31, the jeweler said. All figures were reported at constant exchange rates. The group’s stronger revenues defy an otherwise disappointing holiday season for U.S. bricks-and-mortar jewelry retailers.
MINING
Rio Tinto Raises Diamond Output
Rio Tinto’s rough-diamond production grew 4% to 18 million carats in 2016, the lower end of its guidance, as it continued to step up underground operations at its Argyle mine in Australia. Output at Argyle increased 4% to 14 million carats. Production at the Diavik mine in Canada rose by the same proportion, with Rio Tintos 60% share amounting to 4 million carats. The miner forecast production will rise to between 19 million and 24 million carats in 2017.
Diavik Mine to Escalate Diamond Production
Dominion Diamond Corporation forecast production at the Diavik mine in Canada will increase by up to 14% this year after output rose in 2016. The miner projected rough-diamond recovery of 7.1 million to 7.6 million carats in 2017. Production increased 4% to 6.7 million carats in 2016, but was below the companys forecast.
DiamondCorp Insolvency Hinges on Wage Deal
DiamondCorp warned it will likely enter insolvency proceedings unless an agreement is reached with the mining union over retrenchment and payment of outstanding wages. The company also announced a share sale to raise $1.2 million (GBP 1 million) to fund the care and maintenance of its Lace mine in South Africa, after operations were suspended because of severe flooding in November. Deloitte & Touche, DiamondCorps business-rescue practitioner, is in negotiations with the Association of Mineworkers and Construction Union.
ALROSA’s Diamond Resources Decline
ALROSA’s rough diamond resources fell 4% to 1.03 billion carats as at July 1, 2016, the Russia-based miner reported. Back on January 1, 2015, the resources stood at 1.08 billion carats. Both assessments were carried out in accordance with a code outlined by the Joint Ore Reserves Committee (JORC), the Australasian guidelines for reporting mineral resources and ore reserves, according to ALROSA. Mineral reserves, defined as resources whose mining is economically feasible, declined almost 1% to 653 million carats.
GENERAL
Gold Set to Shine on Stronger Asian Demand
The World Gold Council (WGC) predicted gold prices will continue to rise in 2017 as growth in Asia and political uncertainty in the west are expected to support demand. Investment demand in China has grown, outweighing weakness in the jewelry sector, the WGC said. In India, liquidity squeeze resulting from the government’s demonetization policy will impact gold demand in the short term but increased transparency and formalization of the economy will support growth in the long run.
Diamond Tiara Crowns Fellows Auction
U.K.-based Fellows sold $627,000 (GBP 520,000) worth of jewelry at an auction that was 74% sold by lot and 87% sold by value. A brilliant round, 6.43-carat, K-color, VVS2-clarity diamond ring was the most expensive item at the sale, fetching $38,986, or $6,063 per carat. Fellows also auctioned a Victorian tiara featuring 19 to 20 carats of J-L color diamonds with clarity ranging from SI2 to “P1,” which is equivalent to the GIA’s I1 grade. The piece fetched $19,493.
ECONWATCH
Diamond Industry Stock Report
Birks Group (+15%) stood out among U.S. retailers as its holiday sales outperformed the jewelry market. Tiffany (+2.8%) defied disappointing results. Industry stocks were otherwise roughly stable or lower, with Movado Group (-4%) heading the declines. In the Far East, Chow Tai Fook (+4.3%) and Luk Fook (+2.5%) gained as the latter posted improved China sales data. Indian markets showed signs of recovery, with share-price increases led by Lypsa Gems (+8.2%).
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Jan 19, 2017 (13:05 GMT) Jan 12, 2017 (12:53 GMT) Chng.
$1 = Euro 0.94 0.94 0.00
$1 = Rupee 68.13 67.97 0.16
$1 = Israel Shekel 3.81 3.82 -0.01
$1 = Rand 13.60 13.46 0.14
$1 = Canadian Dollar 1.33 1.31 0.02
Precious Metals Chng.
Gold $1,204.98 $1,204.73 $0.25 0.0%
Platinum $966.35 $986.80 -$20.45 -2.1%
Silver $17.02 $16.92 $0.10 0.6%
Stock Indexes Chng.
BSE 27,308.60 27,247.16 61.44 0.2%
Dow Jones 19,804.72 19,954.28 -149.56 -0.7%
FTSE 7,212.14 7,285.86 -73.72 -1.0%
Hang Seng 23,049.96 22,829.02 220.94 1.0%
S&P 500 2,271.89 2,275.32 -3.43 -0.2%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment January 26, 2017
Market hoping next week’s Spring Festival will signal renewed growth in the Chinese jewelry market. Diamond manufacturing increasing despite sluggish U.S. post-holiday demand. Profit margins under pressure as rough prices rise at larger-than-expected $720M De Beers sight. Miners anticipate strong rough market in 2017. ALROSA plans 2017 production +6% to 39.2M cts. Petra Diamonds 1H sales +48% to $229M, production +24% to 2M cts. De Beers 2016 sales volume +55% to 32M cts, average price -10% to $187/ct., production -5% to 27.4M cts. Chow Sang Sang warns 2016 profit fell 30%-40%. Blue Nile unveils diamond buyback scheme. David Block to replace Uzi Levami as Sarine CEO.
RapNet Data: January 26
Diamonds 1,259,990
Value $7,588,402,271
Carats 1,341,632
Average Discount -30.20%
www.rapnet.com
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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QUOTE OF THE WEEK
Sentiment has changed and continues to change. So luxury is interpreted in a different manner. Luxury is about giving happiness and pleasure but it can’t be ostentatious. It must convey class and style and it must transcend price.
Roberto Coin, owner of his eponymous company, to Rapaport News at this week’s VicenzaOro fair.
MARKETS
United States: Trading relatively slow. Some buzz at India Diamond Week in New York with dealers assessing available inventory and prices rather than closing deals…
Belgium: Polished market quiet with rising concerns about profitability following price increases at De Beers sight…
Israel: Quiet market as dealer trading has slowed. U.S. demand is order-specific while suppliers wait for larger post-holiday inventory requests…
India: Polished trading cautious with buyers uncertain about prices. Shortages in select categories but large volume of goods are in production…
Hong Kong: Dealer and wholesale markets quiet with most companies on vacation for next week’s Chinese New Year festival (Jan. 28)…
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INDUSTRY
Rough Market Wakes Up at Large De Beers Sight
De Beers rough-diamond sales jumped 32% to $720 million in January as manufacturers restocked following the holiday season. The first sight is traditionally strong after manufacturing slows during the November Diwali festival. It rises in the first quarter in anticipation retailers will replenish inventory sold during the festive shopping period. The sight was the largest sale since July 2014, according to Rapaport records, and prices reportedly rose.
Blom Diamonds Set for $4M Takeover
Tychean Resources agreed to acquire 74% of Blom Diamonds Cutting Works and Ernest Blom Diamonds for up to $4.1 million (AUD 5.5 million). Tychean will initially issue shares worth about $206,352 (AUD 273,800), while additional shares valued at $1.3 million will be granted in each of the next three years if the diamond company meets pre-determined profit conditions. Founder Ernie Blom (pictured), the current president of the World Federation of Diamond Bourses (WFDB), will become managing director of Tychean when the deal closes.
Sarine Appoints New CEO to Succeed Levami
Sarine Technologies named David Block as its new chief executive officer after Uzi Levami stepped down for personal reasons. Levami, who headed the diamond technology company for eight years, will continue to serve as an executive director at Sarine. Block (pictured) will take over on May 1, having served as the group’s deputy CEO and chief operating officer since 2012. He played a key role in the rollout of Sarine’s Galaxy inclusion-mapping systems.
RETAIL & WHOLESALE
Hong Kong’s Chow Sang Sang Warns on Profit
Chow Sang Sang warned profit slumped 30% to 40% in 2016 due to a drop in jewelry demand in China and Hong Kong. The company added the decline was steeper because a one-off gain from a corporate deal inflated the jeweler’s profit in 2015. Weak consumer sentiment and a drop in Hong Kong tourist arrivals have dented sales at the region’s top jewelry chains over the past two years.
Blue Nile Unveils Diamond Buyback Scheme
Blue Nile launched a program allowing consumers to sell their diamonds to the online retailer for cash. The service, developed with ecommerce specialist Mondiamo, is currently only available in the U.S. and Canada. Mondiamo is using Blue Nile’s live pricing data for GIA-graded diamonds to create a guaranteed cash-price range presented to potential sellers. Customers are given a free, insured shipping kit to submit their diamond jewelry for inspection and evaluation, after which Blue Nile makes a final cash offer.
Samuel Aaron Jewelry Plant to Close
Richline Group is shutting a jewelry-manufacturing plant in New York State following its acquisition of The Aaron Group this month. The factory, located in Mount Vernon, will close April 25, with all 42 employees being affected. Layoffs will occur over 14 days beginning April 12. Richline will spend the next three months working on plans to integrate employees, departments and facilities following the merger, a spokesperson said.
Birks Inks Deal to Sell Diamonds in Asia
Montreal-based Birks Group has tied up with online retailer Luxify to sell top-end polished diamonds to consumers in Asia. The companies will offer rare diamonds of Canadian origin on the Luxify ecommerce site, headlining the launch with the 35.11-carat, fancy dark yellowish-brown ‘Radiant North,’ described as the country’s largest colored diamond. The partnership represents a shift into a new market for Birks as it currently operates 46 jewelry stores across Canada and the U.S.
MINING
Higher Carat Sales Drive De Beers Growth
De Beers sales volume grew 55% to 32 million carats in 2016 as lower rough prices and depleted polished inventories stimulated demand. The increases reflect improved trading conditions compared to the second half of 2015, De Beers explained. In 2015, demand plummeted due to oversupply and inflated prices, resulting in bloated rough-inventory levels at the company. Those were reduced in 2016 as production fell 5% to 27.3 million carats. The company’s average sales price dropped 10% to $187 per carat during the year.
ALROSA Targets Higher Rough Output
ALROSA is planning to raise production 6% to 39.2 million carats in 2017, underlining greater optimism in the diamond mining sector. VTB Capital expects robust rough demand in the first half of 2017 will support revenue-growth momentum at ALROSA. The bank projected the miner’s revenue will increase 2% to $5.46 billion (RUB 323.33 billion) this year. ALROSA anticipates its production will rise to 39.9 million in 2018 and peak at 41.5 million in 2019.
Petra’s Rough Diamond Sales Sparkle
Petra Diamonds revenue leapt 48% to $228.5 million in the six months that ended December 31, due to mine expansions and a stable rough market. Sales by volume jumped 47% to 1.9 million carats while prices on a like-for-like basis were flat. The miner expects market conditions to remain steady in the current half-year. Petra’s production jumped 24% to 2 million carats while a new processing plant at the Cullinan mine will enable group output of up to 4.6 million carats this fiscal year.
GENERAL
Tough Year For Timepieces as Swiss Watch Exports Slide
Swiss watch exports slumped 10% to $19.45 billion (CHF 19.41 billion) in 2016 as demand continued to shrink in Hong Kong, the largest market for the timepieces. The industry saw some improvement in December with a gentler drop of 4.6% to $1.66 billion (CHF 1.66 billion). The exports were buoyed by double-digit growth in orders from China and the U.S., the Federation of the Swiss Watch Industry reported. Hong Kong remained sluggish, with shipments to the municipality down 16% during the month.
Swiss Gem Lab Launches U.S. Operations
Gübelin Gem Lab, known for its expertise in colored gemstones, opened a lab in New York as part of its global expansion and to enable greater participation in U.S. trade fairs. The company has been laying the ground work for the launch since 2015, and has become a member of the American Gem Trade Association (AGTA). It will test gemstones on-site for the first time at the AGTA GemFair in Tucson, which runs from January 31 to February 5.
Stornoway Seeks New Finance Chief
Robert Chausse has stepped down as chief financial officer of Stornoway Diamond Corporation, just two months after the company launched operations at the Renard mine in Canada. Chausse (pictured) served in the position for less than a year and is leaving to pursue other career opportunities, Stornoway explained. The miner intends to appoint a new CFO by March 1.
ECONWATCH
Diamond Industry Stock Report
U.S. retail stocks gained as the Dow Jones Industrial Average broke the 20,000-point barrier for the first time. Birks Group (+26.5%) led the pack, continuing its rise since reporting strong holiday sales. Resurgent rough-diamond sales boosted De Beers parent company Anglo American (+3.3%), with investors also backing miners such as Lucara Diamond (+8.2%) and Gem Diamonds (+5%). European luxury stocks were mainly higher, headed by Damiani (+2.9%), while markets in India and the Far East were mixed.
View the detailed industry stock report
Jan 26, 2017 (13:30 GMT) Jan 19, 2017 (13:05 GMT) Chng.
$1 = Euro 0.93 0.94 0.00
$1 = Rupee 68.16 68.13 0.03
$1 = Israel Shekel 3.79 3.81 -0.02
$1 = Rand 13.35 13.60 -0.24
$1 = Canadian Dollar 1.31 1.33 -0.02
Precious Metals Chng.
Gold $1,190.47 $1,204.98 -$14.51 -1.2%
Platinum $975.65 $966.35 $9.30 1.0%
Silver $16.87 $17.02 -$0.15 -0.9%
Stock Indexes Chng.
BSE 27,708.14 27,308.60 399.54 1.5%
Dow Jones 20,068.51 19,804.72 263.79 1.3%
FTSE 7,178.49 7,212.14 -33.65 -0.5%
Hang Seng 23,374.17 23,049.96 324.21 1.4%
S&P 500 2,298.37 2,271.89 26.48 1.2%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment February 2, 2017
Polished trading slow with Far East dealers on holiday during the Chinese New Year. Manufacturing profit margins squeezed with high rough prices and soft polished demand as 1 ct. RAPI -0.9% in Jan. U.S. 2016 jewelry sales +5% to $71.4B but consolidation continues as JBT reports 1,669 jewelry businesses closed in 2016. Signet makes key personnel changes to strengthen digital offering after lackluster holiday season. LVMH 2016 jewelry sales +5% to $3.7B. ALROSA 2016 production -2% to 37.4M cts., sales +34% to 40.1M cts. Belgium 2016 polished exports -10% to $11.8B, rough imports +9% to $12.1B. Rio Tinto to close U.S. office. Brendan Bell to step down as Dominion CEO.
RapNet Data: February 2
Diamonds 1,273,522
Value $7,655,960,304
Carats 1,352,757
Average Discount -30.35%
www.rapnet.com
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.
Get Current Price List | Subscribe to Rapaport | Join RapNet
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February 5-8 Sun-Wed
Rapaport Single Stone Auction
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February 8-15 Wed-Wed
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QUOTE OF THE WEEK
The [Tiffany] brand is definitive and iconic, yet continues to push and evolve with the times.
Lady Gaga after collaborating with Tiffany & Co. for the jewelers new campaign
MARKETS
United States: Polished market stable but quieter than expected for this time of year. Dealers surprised by strong rough market while polished and retail sectors sluggish…
Belgium: Cautious polished trading during Antwerp Fair. Steady orders for specific goods with very little inventory buying…
Israel: Polished trading quiet. Growing concerns about low profitability amid continued strength in the rough market. Steady demand for 0.30 to 2.99 ct., F-I, SI2-I1, RapSpec A3+ diamonds…
India: Trading subdued with limited transactions as foreign buyers push for deeper discounts. Very few large orders in place from retailers building up inventory…
Hong Kong: Dealer market on vacation with retailers focusing on Chinese New Year season. Busy shopping period calms as consumers spend holiday week with family or traveling…
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RAPAPORT STATEMENT
Polished Prices Slide Despite Buoyant Rough Market
Diamond manufacturing profits were squeezed in January amid strong rough demand while polished prices softened. The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 0.9% during the month and was down 6.8% from a year ago. Manufacturers raised polished production as they expect trading to improve after the holiday season. However, the high level of rough sales was not supported by activity in the polished and retail sectors, with jewelers reporting disappointing December sales.
Purchase the full Rapaport Monthly Report – February 2017
INDUSTRY
U.S. Jewelry Market Shrinks in 2016
The number of jewelry businesses operating in the U.S. fell 6% to 26,725 last year, according to the Jewelers Board of Trade. Some 1,518 businesses simply discontinued, unrelated to financial failure or merger, an increase of 63% from the previous year. Consolidation from mergers or takeovers increased 3.5% to 118, while bankruptcies fell 15% to 33. The number of jewelry retailers leaving the industry grew 43% to 1,269.
Prices of Blue Diamonds Reach All-Time High
The Fancy Color Diamond Index climbed 0.4% in 2016 due to continued strength in demand for blues and pinks, the Fancy Color Research Foundation reported. Prices of blue diamonds jumped 5.5% to an all-time high due to low supply. Prices of pink diamonds increased 1.4%, while yellow-diamond prices fell 4%.
Global Weakness Hits Antwerp Diamond Trade
Belgium’s polished diamond trade fell last year due to the economic slowdown in India and China, the Antwerp World Diamond Centre (AWDC) said. Polished exports slid 10% to $11.8 billion, while imports fell by the same margin to $11.39 billion. Belgium’s rough trade performed better, with imports growing 8.6% to $12.09 billion and exports up 11% to $12.73 billion last year.
Rio Tinto to Close New York Marketing Base
Rio Tinto Diamonds will shut its North American sales and marketing office in the first quarter as part of a cost-cutting exercise. The New York representative base was set up a decade ago to serve as a gateway to the U.S. retail sector. The miner will continue to collaborate with its ‘Select Diamantaire’ clients on marketing initiatives in the country. Brandee Dallow (pictured), who headed the New York operation, will leave Rio Tinto when the office closes.
RETAIL & WHOLESALE
U.S. Jewelry Sales Rise Amid Higher Prices
U.S. jewelry sales increased 4.8% to $71.4 billion in 2016, government data showed. Sales at specialist jewelry stores climbed 3% to $25.3 billion in the first 11 months, according to separate data, which lags by a month. Sales grew as prices rose with the consumer price index (CPI) for jewelry jumping 6.2% during the year. Watch sales increased 5.3% to $9.5 billion with the CPI for watches advancing 5.2%.
LVMH Growth Highlights High-End Resilience
LVMH Moët Hennessy Louis Vuitton reported jewelry and watch sales increased 9% to $1.05 billion (EUR 982 million) in the fourth quarter and by 5% to $3.71 billion for the full year. The group, which includes Bulgari, Chaumet, Tag Heuer, Hublot and De Beers Diamond Jewellers, said it shrugged off political and economic uncertainty with growth driven by improvements in China, South Korea and the Middle East.
Pandora Enters Burgeoning Indian Jewelry Market
Pandora is opening its first stores in India to capitalize on expected growth in the country. The Danish jeweler, known for its charm bracelets and silver jewelry, is planning about 50 concept stores in the next three years, in addition to shop-in-shops, with five concept stores projected for 2017. The jeweler selected Pan India Charms & Jewellery as its official distributor in the country.
Signet Shakes Up Senior Management
Signet Jewelers announced several strategic and operational appointments following disappointing holiday sales. Bryan Morgan, VP of supply-chain management and repair, was promoted to COO to replace Ed Hrabak who is retiring. Sebastian Hobbs, currently U.K. managing director, was named president and chief customer officer, a new position created to improve the consumer experience. Brian Tilzer, chief digital officer at CVS Health, was appointed to Signet’s board.
MINING
ALROSA Caps 2016 Output to Reduce Stocks
ALROSA’s diamond production fell 2% to 37.4 million carats in 2016 as the miner focused on reducing excessive inventory from the previous year. Sales volume increased 34% to 40.1 million carats while the value of sales exceeded $4.3 billion. ALROSA said it reduced output at its alluvial deposits to align with the weak diamond market environment in 2015. Fourth-quarter production increased 10% to 9.5 million carats driven by its underground operations, while the company is planning to raise output 6% this year.
First Gahcho Kué Diamond Sale Disappoints
Mountain Province failed to sell a quarter of the goods offered at its inaugural sale of rough diamonds from the Gahcho Kué mine. The company withdrew mostly brown and lower-quality supply from the tender due to insufficient bids as tight liquidity limited Indian buyers. The January sale took place in Antwerp and fetched $6.3 million from 49,420 carats. Production at Gahcho Kué, a joint venture with De Beers, launched in September, with output reaching 862,000 carats in 2016.
Lucapa Buys Lesotho Diamond Mine
Lucapa Diamond Company acquired a 70% stake in the Mothae mine in Lesotho for $9 million. The company expects the resource will complement its high-value Lulo mine in Angola since it also contains large, premium-value and type-IIa diamonds. The miner received a 10-year mining lease and a right to extend by another decade from the Lesotho government, which owns the remaining 30% of the mine. Mothae was previously owned by Lucara Diamond Corporation.
First Liqhobong Rough Sale Set for February
Firestone Diamonds will hold its maiden sale of rough diamonds from the Liqhobong mine in Antwerp from February 6 to 10, with results expected the following week. The company plans to host another sale toward the end of March and two sales per quarter thereafter. Production at the Lesotho-located mine was launched in October with more than 20 special stones above 10.8 carats and several fancy yellow diamonds among the mix.
GENERAL
Dominion CEO Quits Before Companys Move to Calgary
Dominion Diamond Corporation’s chief executive Brendan Bell will stand down when the miner moves its headquarters from Yellowknife to Calgary. A process is underway to find a replacement, with Bell (pictured) committing to the role until June 30. Bell said the move was necessary to reduce operating costs, but he could not continue as CEO for personal reasons. Bell joined Dominion in July 2013, effectively serving as CEO since November 2014.
RJC Unveils New Self-Assessment Guide
The Responsible Jewellery Council introduced an updated self-assessment workbook in a revised format designed to help members understand its code of practice. The group, which monitors sourcing practices in the jewelry market, explained the new publication tailors self-assessment questions toward the activities of its members and includes instructions to help companies plug compliance gaps ahead of an audit.
ECONWATCH
Diamond Industry Stock Report
Signet (-7.2%) led the declines in U.S. retail stocks after it announced a shake-up of its senior management team. European luxury shares were also down, headed by Richemont (-2.2%), after the Cartier owner also revealed several leadership changes. Chow Tai Fook (+5.9%) led resurgent Far East stocks, while Indian jewelry shares improved.
View the detailed industry stock report
Feb 2, 2017 (12:25 GMT) Jan 26, 2017 (13:30 GMT) Chng.
$1 = Euro 0.93 0.93 -0.01
$1 = Rupee 67.32 68.16 -0.84
$1 = Israel Shekel 3.76 3.79 -0.03
$1 = Rand 13.40 13.35 0.05
$1 = Canadian Dollar 1.30 1.31 -0.01
Precious Metals Chng.
Gold $1,221.30 $1,190.47 $30.83 2.6%
Platinum $1,006.55 $975.65 $30.90 3.2%
Silver $17.67 $16.87 $0.80 4.7%
Stock Indexes Chng.
BSE 28,226.61 27,708.14 518.47 1.9%
Dow Jones 19,890.94 20,068.51 -177.57 -0.9%
FTSE 7,147.91 7,178.49 -30.58 -0.4%
Hang Seng 23,184.52 23,374.17 -189.65 -0.8%
S&P 500 2,279.55 2,298.37 -18.82 -0.8%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment February 9, 2017
Diamond demand stable as reduced supply of polished and higher rough costs support price levels. Over $1B of new higher-priced rough entered the market in January without any increase in polished demand. Oversupply of expensive polished expected. Chinese New Year good for gold, but gem-set jewelry sales stagnate. Chow Tai Fook holiday sales +4% in China, -11% in Hong Kong & Macau. U.S. retailers hoping to tap pent-up diamond jewelry demand over Valentine’s Day. Indian jewelers starting to restock for ongoing wedding season after demonetization froze orders. ALROSA Jan. sales +60% to $365M. Tiffany & Co. CEO Frederic Cumenal resigns after disappointing Christmas.
RapNet Data: February 9
Diamonds 1,272,940
Value $7,619,110,474
Carats 1,337,727
Average Discount -30.52%
www.rapnet.com
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.
Get Current Price List | Subscribe to Rapaport | Join RapNet
RAPAPORT ANNOUNCEMENTS
February
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Feb-Mar 21-1 Tue-Wed
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QUOTE OF THE WEEK
The diamond-cutting sector in India is obviously coping with the problems caused by the currency reform in the country somewhat faster than expected.
ALROSA vice-president Yury Okoemov
MARKETS
United States: Slight improvement in NY trading. Dealers managing with lower inventory as retailers start to replenish holiday stock…
Belgium: Cautious trading after quiet Antwerp fair. Buyers testing the market by offering deeper discounts but no urgency to buy goods…
Israel: Polished trading quieter than expected for this time of year. Hopes that high-profile foreign delegations will raise trading levels at Israel International Diamond Week (Feb. 13-16)…
India: Sentiment improving as impact of demonetization begins to fade. Jewelry retailers starting to buy again after two-month lull as wedding season demand improves…
Hong Kong: Wholesale market quiet as dealers slowly return from Chinese New Year vacation. Chinese tourist arrivals steady during the festival but Hong Kong attracting price-sensitive visitors from lower-tier cities…
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INSIGHTS
Can Lady Gaga Save Tiffany & Co?
Tiffany & Co. appears to be shaking things up. It’s replacing its CEO, has brought in designer Reed Krakoff as its chief artistic officer and ran a Super Bowl ad for the first time featuring Lady Gaga. Gaga brings her own femininity and twist to the Tiffany story, while her strong opinions suggest the jeweler recognizes it’s missing out on a generation of consumers. But will Gaga, and her 65 million Twitter followers, spark company growth and inspire some much needed creativity in the industry’s marketing?
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INDUSTRY
DPA to Scrutinize Synthetic Detection Machines
The Diamond Producers Association (DPA) plans to audit synthetics detectors to help the industry navigate its way around the broad choice of machines available on the market. The group is laying the groundwork for an independent laboratory that will test diamond-screening devices currently sold in the market and publish its results to the trade. The marketing body aims to gather a committee of representatives from major industry organizations by the end of March to assess the scope of the program.
India’s Jewelry Market Shows Signs of Recovery
Traffic at this week’s Signature India International Jewellery Show was light, but buyers were placing orders again. The upswing in demand was as a result of Indian jewelry retailers needing goods for the rest of the wedding season, as they haven’t bought for two to three months since the government’s demonetization program froze activity in November. Exhibitors said sales were still 20% below last year’s levels, but were happy to be doing business again. Gold sales were better than studded jewelry, while there was very little loose-diamond trading.
ALROSA Gains as Indian Demand Stabilizes
ALROSA reported a 60% jump in diamond sales to $365.4 million in January as manufacturing in India showed signs of a turnaround. Revenue from rough diamonds stood at $358.2 million, while polished sales were pegged at $7.3 million. India’s diamond trade had slowed in the last two months of 2016 as the government invalidated INR 500 and INR 1,000 notes, snapping liquidity. However, diamond cutters in India are coming to terms with the new reality faster than expected, ALROSA explained.
RETAIL & WHOLESALE
Tiffany CEO Cumenal in Shock Departure
Tiffany & Co.’s chief executive officer Frederic Cumenal stepped down with immediate effect, the company announced on Sunday. Chairman and former CEO Michael Kowalski has taken over the role in the interim. Tiffany’s board has been disappointed by recent financial results, Kowalski noted, with holiday sales in the Americas falling 4%, partly due to protests outside New York’s Trump Tower that restricted access to the flagship Fifth Avenue store. Cumenal (pictured) had been CEO since April 2015.
Chow Tai Fook’s Holiday Sales Jump in China
Chow Tai Fook said sales from the mainland outperformed those in Hong Kong during the Chinese New Year holiday period. Retail revenue from mainland China showed a 4% jump for January 14 to February 3, which covers the two-week run-up to the festival and the first seven days of the New Year. By contrast, sales in Hong Kong and Macau fell 11%.
Pandora Sales Rise as Store Network Grows
Pandora’s revenue grew 21% to $2.9 billion (DKK 20.28 billion) last year as the jeweler expanded its network of branded stores. The number of Pandora-branded retail locations, known as concept stores, increased by 336 to 2,138 in 2016, the company reported. These types of stores recorded a 37% jump in sales. Revenue from multi-branded stores fell 7% as the number of locations slumped by 1,829 to 3,966. Group profit jumped 64% to $861.9 million.
MINING
Rio Tinto Diamond Sales Lag Behind Market
Rio Tinto’s diamond revenue slid 12% to $613 million last year, even as global rough demand strengthened. Net income dived 41% to $47 million. The decline is at odds with the increase in sales seen at other comparable miners, including De Beers and ALROSA. Overall rough demand recovered in 2016 from a cyclical downturn in the previous year, but varied significantly across product segments, Rio Tinto said.
Rio Tinto Gifts India Mine to Government
Rio Tinto took an unusual decision to hand over the Bunder diamond mining project in India as a gift to a regional government, after walking away from the program last year. The government of Madhya Pradesh, where the project is located, will take ownership of Bunder’s assets and infrastructure in accordance with an order signed last month. In August, the company announced it wouldn’t be continuing with the project because of an internal cost-cutting exercise.
Letšeng Sales Fall as Large-Diamond Output Drops
Gem Diamonds said sales from its high-value Letšeng mine fell 22% to $184.6 million last year as the company extracted fewer large rough diamonds than expected. The average selling price dropped 26% to $1,695 per carat. Production of rough diamonds weighing 100 carats or more at Letšeng has crept up every year from three stones in 2012 to a peak of 11 in 2015, before falling to four last year.
GENERAL
Gold Price Hike Dampens Jewelry Demand
A jump in gold prices and sluggishness in India and China negatively impacted global jewelry demand last year, according to the World Gold Council. Global demand fell 15% to 2,041.6 tonnes in 2016, a seven-year low. Indian demand for gold jewelry fell 22%, partly because the price of the metal jumped 8%, the council explained. A nationwide jewelers’ strike in the first quarter also contributed to the weakness, as did the government’s demonetization policy in November.
Gahcho Kué Hits Big League with 68ct. Diamond
Mountain Province Diamonds recovered the largest gem-quality stone yet from its Gahcho Kué mine in Canada. At 67.87 carats, the octahedron-shaped rough diamond was extracted during the ramp-up of the mine, which was launched in September last year. The mine is on track to achieve commercial production, meaning 70% of capacity, during the first quarter, with the second sale of diamonds scheduled to take place in Antwerp from February 20 to March 1.
ECONWATCH
Diamond Industry Stock Report
European luxury stocks declined, with Swatch Group (-4.9%) falling the most as the timepiece retailer reported a drop in full-year sales and profit. Jewelry retailer Vaibhav (+43%) led mixed Indian shares after reporting promising quarterly profit figures. Hong Kong industry stocks also varied, with Chow Tai Fook (-3.2%) heading the declines after releasing disappointing Hong Kong sales over the Chinese New Year even as mainland revenue was positive. Mining stocks generally weakened, with Gem Diamonds (-3%) reporting lower sales and fewer large-diamond recoveries.
View the detailed industry stock report
Feb 9, 2017 (12:19 GMT) Feb 2, 2017 (12:25 GMT) Chng.
$1 = Euro 0.94 0.93 0.01
$1 = Rupee 66.85 67.32 -0.47
$1 = Israel Shekel 3.75 3.76 -0.01
$1 = Rand 13.41 13.40 0.01
$1 = Canadian Dollar 1.31 1.30 0.01
Precious Metals Chng.
Gold $1,239.28 $1,221.30 $17.98 1.5%
Platinum $1,021.00 $1,006.55 $14.45 1.4%
Silver $17.76 $17.67 $0.09 0.5%
Stock Indexes Chng.
BSE 28,329.70 28,226.61 103.09 0.4%
Dow Jones 20,054.34 19,890.94 163.40 0.8%
FTSE 7,209.11 7,147.91 61.20 0.9%
Hang Seng 23,525.14 23,184.52 340.62 1.5%
S&P 500 2,294.67 2,279.55 15.12 0.7%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
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%
www.rapnet.com
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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RAPAPORT ANNOUNCEMENTS
Feb-Mar 21-1 Tue-Wed
Rapaport Quarterly Pawnshop Auction
New York & Hong Kong
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Feb-Mar 21-3 Tue-Fri
Rapaport Melee Auction
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March 1-8 Wed-Wed
Rapaport Single Stone Auction
New York & Israel
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QUOTE OF THE WEEK
Dont 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.
MARKETS
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…
INSIGHTS
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...
INDUSTRY
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.
RETAIL & WHOLESALE
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.
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.
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.
MINING
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.
GENERAL
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.
ECONWATCH
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%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
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