Rapaport Weekly Market Comment Dec. 5, 2014
Polished market weakens with Nov. RAPI 1 ct. -1.7%. Thanksgiving weekend sales -11% to $50.9B, Cyber Monday online sales +17% to $2B as consumers move online. Rough prices out-of-line forcing cutters to reduce polished prices to maintain liquidity. Situation unsustainable as sightholders overpay for rough to ensure future supply in 2015, while polished demand declines. Diamond market is running out of money. De Beers expected to keep stable rough prices at next week’s sight. ALROSA’s 3Q revenue +8% to $909M, net loss of $223M. U.S. Oct. jewelry sales -0.5% to estimated $4.8B, watch sales -1.5% to $655M. Hong Kong YTD polished imports +9% to $14.9B, polished exports +18% to $10.5B.
RapNet Data: Dec. 4
Diamonds 1,539,382
Value $8,390,341,434
Carats 1,524,213
Average Discount -28.26%
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QUOTE OF THE WEEK
While Thanksgiving weekend saw a slight decline, we are still hopeful that the Christmas season will prevail. Seven of the top 10 sales days are still to come, and retailers will be prepared to appeal to shoppers who are notorious for seeking last minute deals.
Bill Martin | ShopperTrak
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INDUSTRY
Polished Prices Battling Headwinds
Polished diamond prices fell in November as suppliers lowered prices in an effort to raise cash flow. Tight liquidity remains the biggest challenge facing diamond dealers and manufacturers. Demand is selective with low trading levels, while the focus of the industry has shifted to consumer demand during the Christmas retail shopping season.
The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds declined by 1.7% in November, while RAPI for 0.30-carat diamonds fell 2.2%, RAPI for 0.50-carat diamonds dropped 1.6% and RAPI for 3-carat diamonds decreased by 1.8%. Dealer and manufacturer sentiment is weak. U.S. demand is stable but Far East markets are quiet. Polished inventory levels are high across the pipeline and profit margins are being squeezed as polished prices have declined since April, while rough prices have been relatively steady.
RETAIL & WHOLESALE
U.S. Christmas: Best Spending Days to Come
U.S. retail sales over the Thanksgiving weekend experienced a broad-based decline; however, analysts believe that results were more indicative of shifting consumer spending patterns rather than their unwillingness to open wallets. Consumers are growing increasingly aware of brick-and-mortar promotions and price gimmicks, especially as mobile devices become their most important research tool. Online sales continue to experience healthy growth and consumers are also adopting a "wait and see" attitude toward gift spending, expecting greater bargains as Christmas draws closer.
ShopperTrak, which measures larger shopping centers and malls, anticipates that the biggest retail day of the year will be Super Saturday, which is December 20, offering retailers hope that consumer spending will only increase dramatically in the weeks ahead. While retail sales fell 2.1% to $21.8 billion for the four-day holiday weekend, by ShopperTraks measure, stores that opened on Thanksgiving Day sacrificed sales from Black Friday (down 6.8% to $9.1 billion) and Sunday (down 6% to $3.5 billion), while Saturday was flat at $6 billion.
By comparison, ecommerce sales surged 24% year on year to $6.6 billion over the weekend and including Cyber Monday, according to comScore Inc.
Self-reported spending figures across all retail channels, however, provided a different summary over the holiday period as the average shopper spent $381, down 6.4%, and overall spending fell 11% to $51 billion, according to the National Retail Federation (NRF). The organization claimed that a stronger U.S. economy was to blame, since consumers were not being teased into stores with steep discounts this year.
The NRF maintains its guidance for a 4% increase in Christmas-season sales for all channels, ShopperTrak is more conservative by suggesting sales will rise 2% in stores, and comScore predicts that online sales will improve 16%.
Affluents Gift Spending May Increase
Affluent U.S. consumers have grown slightly more uneasy about economic conditions in the past 12 months, according to the American Affluence Research Center; however, the groups proprietary composite index held to neutral territory, which is good news for anticipated Christmas gift spending. The average index for changes in spending plans is 13 points higher (92 versus 79) for those expecting an increase or no change in their income versus those expecting a decline in income. The difference is 29 points (94 versus 65) based on net worth expectations, the group observed.
The typical affluent household forecasts spending an average of $2,623 on gifts this Christmas, equal with 2013 plans, representing $31 billion in total. But American Affluence Research also pointed out that the affluent often tend to spend more for gifts than they had planned.
Hearts On Fire Launches in China
The diamond and jewelry brand Hearts On Fire launched in Mainland China by sharing its marketing and retail rollout strategies and unveiling a standalone store in Shanghai, which will officially open soon. In addition, the brand intends to open Hearts On Fire points of sale in Hong Kong and Macau. Fashion icon Olivia Palermo, joined the celebration by showcasing the new Hearts On Fire "Fire" collection that will be sold exclusively in China.
Hearts On Fires strategic plan involves capturing two key Chinese consumer trends to grow diamond demand. By promoting its specialty diamond offerings to younger consumers, Hearts On Fire expects to attract that demographic, which now favors diamond jewelry over traditional gold jewelry. Secondly, the brands premium luxury positioning will cater to Chinas expanding wealthy consumer class as they become more brand aware and appear eager to make lifestyle purchases.
Apple to Disrupt the Watch Industry
Scott Galloway, the founder of L2 Business Intelligence for Digital, a firm that analyzes digital trends of numerous retail brands, warned that the Apple Watch, the tech giant’s foray into the luxury world, could be a potentially “disrupting” factor.
The Apple Watch, which will be available in 2015, is predicted to hit sales of $13.5 billion during the first year -- a mark that, if reached, would make Apple the world’s largest watch company. Galloway also said that watch and jewelry companies are less savvy than their luxury retail peers in navigating the digital universe to sell and promote product. With Apple clearly crowding the space, a typical jewelers lack of technical savvy will impact the bottom line. It’s possible, Galloway said, that the advent of the Apple Watch could create the incentive for watch companies to close that digital gap. “They’re going to have to if they want to stay competitive,” he concluded.
India Drops 80:20 Rule
India removed the 80:20 gold import scheme, thus freeing up incoming shipments of the precious metal for the wedding season. The scheme, which had been in place since August 2013, was imposed for the purpose of curbing gold imports and, in turn, reducing a growing current account deficit in the country. Many industry leaders have been critical of the 80:20 scheme, blaming it on a dramatic increase in gold smuggling. The notification to end the scheme was shared by the Reserve Bank of India.
Court Fines Pandora
Pandora Jewelry was ordered to pay a $333,000 (DKK 2 million) fine in connection with a breach of the Securities Trading Act in Denmark. The company stated that it is reviewing whether or not to appeal the ruling that was passed by the District Court in Glostrup. The jewelry company stated that the securities charge dated back to August 2, 2011, at which time it downgraded revenue growth projections just two weeks prior to the scheduled reporting date of its second-quarter results that year. The court ruled that Pandora was obliged to have announced any downward adjustments in projected revenue no later than July 18, 2011.
Arcos East Reopens at Almas Tower
The Dubai Multi Commodities Centre (DMCC) welcomed ALROSA and its subsidiary Arcos East DMCC to Dubai, as the mining giant opened a sales office in Almas Tower. ALROSAs move to reopen in Dubai highlighted the significant role the city plays in the diamond trade, especially since the global downturn in 2009. ALROSA joins some 180 Russian companies currently based in the free zone, including diamond manufacturer Smolensk Kristall and Lukoil.
Delhi to Host Diamond Conference
The inaugural World Diamond Conference in India, organized by the Gem & Jewellery Export Promotion Council (GJEPC) and the World Diamond Mark Foundation (WDMF) and supported by the Ministry of Commerce and Industry of India, takes place in Delhi on December 11 and 12. Conference participants will discuss pressing industry issues and learn new ways to excite consumers about diamonds. Speakers include business leaders from across the industry, from mining to retail marketing.
GENERAL
Daniels Adds to Leadership Team
Daniels Jewelers of California appointed Joseph Donaghy as its chief financial officer. The retailer recently received financial backing from private equity group Palladium Equity Partners and embarked on a range of new initiatives, including expansion and strategic acquisition plans, both inside and outside the state. Donaghy previously served as executive vice president, chief administrative officer and chief financial officer at Ultra Jewelers, prior to and immediately after the chains acquisition by the Signet Group. Donaghy has also served in senior operating positions at Friedman Jewelers and Crescent Jewelers.
Sofisti Leaves Gucci
The CEO of Guccis watches and jewelry division, Michele Sofisti, left the company to pursue other personal and professional opportunities. Patrizio di Marco, Guccis president and CEO, will serve as interim head of the watch and jewelry division, while the company expects to name a permanent replacement for Sofisti shortly. In July, Guccis parent firm Kering announced a group reorganization that would require each of its subsidiaries to have a dedicated full-time CEO. Following that decision, Sofisti resigned his position as CEO of Sowind Group to focus on his efforts on the watches and jewelry division.
Lawson to Oversee Wearable Devices at Movado
Jo An Lawson joined the Movado Group Inc. as its general manager of wearable devices and will lead the company’s strategic alliance expansion initiatives for the wearable sector. In her role, Lawson will be responsible for identifying unique opportunities that position the brand to launch wearable device products, consistent with its luxury product branding philosophy.
Lawson, who is based in San Francisco, California will report to Movados vice chairman, Rick Coté. Most recently, she served as a marketing strategist at West Studios, a multi-disciplinary strategy and creative collective, acting as interim vice president of marketing for technology companies. Previously, Lawson has held various technologies focused marketing positions at Apple and Deloitte Consulting.
Murphy to Leave Christies
Steven P. Murphy will step down from his role as CEO of Christie’s at the end of the year. Patricia Barbizet will become the new CEO as well as continuing in her current role as chairman of Christie’s. Barbizet said that the company is positioned for its next phase of development and she looked forward to leading the global team into a new chapter of innovation and excellence.
MINING
Rio Tinto Approves A21 Development
Rio Tinto approved the development of the A21 kimberlite pipe at the Diavik mine in Canada’s Northwest Territories. The project carries an estimated cost of $350 million and will take four years to complete. Construction will begin next year and the first production is planned for late 2018. Rio Tinto explained that the project will provide an important source of incremental supply at Diavik, ensuring the continuation of existing production levels. A21, which is the fourth pipe at Diavik, is located just south of Diavik’s existing mining operations. Rio Tinto operates the Diavik mine and owns 60% share in the asset with Dominion Diamond Corporation holding the remainder.
Stellar Prepares for a Rough Sale
Stellar Diamonds exported 941 carats of rough diamonds to Antwerp from the Baoulé diamond project in Guinea, marking a milestone for the company as it intends to hold a first sale shortly. The parcel included a few large stones, including a 9.20-carat, 5.50-carat and a 5.1-carat diamond. Stellar Diamonds reached its target processing capacity at the project, with current rates at 2,000 carats per month if they are maintained. The company anticipates holding a diamond sale every two months during 2015.
ZMDC Must Publish Financial Reports
Zimbabwe has been working toward greater financial transparency and, in particular, tracking diamond dividends as part of a long term economic development agreement with the International Monetary Fund. Given this, the countrys Finance and Economic Development Minister, Patrick Chinamasa, in presenting the 2015 budget, proposed that the Zimbabwe Mining Development Corporation (ZMDC) publish annual financial reports, according to the government-run newspaper, The Herald.
The ZMDC, a state-owned entity that is under U.S. sanctions, holds interests in diamond mining firms Marange Resources, Mbada Diamonds, Diamond Mining Corporation, Anjin Investments, Jinan Mining, Kusena Diamonds, Rera Diamonds and Gye-Nyame Resources. The group also owns other mineral mining operations across the country.
Botswana Approves Lerala Assessment
Kimberley Diamonds received authorization for its environmental impact assessment at the Lerala mine in Botswana. The Botswana Department of Environmental Affairs approved and transferred the authorization to Kimberley Diamonds, having previously approved the assessment for DiamonEx, the former owner of the mine. The authorization enables Kimberley Diamonds to upgrade the plant, site infrastructure and tailings storage facilities at Lerala as it plans to resume production mid-year 2015. The company is still required to revise the existing environmental impact assessment and environmental management plan and it expects to submit its final report to the government by the end of January 2015.
Firestone to Resume Production
Firestone Diamonds expects to resume production at the Liqhobong mine in Lesotho in the second quarter of 2016, following a major overhaul of the project. The project includes the construction of a new main treatment plant and supporting infrastructure that is projected to treat 3.6 million tonnes of ore and recover approximately 1 million carats of diamonds a year. The company previously stated that it would need about $222 million to construct and commission Liqhobong’s main treatment plant. Firestone reported spending $36.3 million so far and has placed service orders worth about $116 million for its engineering, procurement, contract and management budget.
STATS
Hong Kong
YTD $Mil. %Chng.
Polished imports $14,948 9%
Polished exports $10,472 18%
Net imports $4,476 -6%
Rough imports $1,654 16%
Rough exports $1,757 13%
Net imports ($103)
Net diamond account $4,373 5%
ECONWATCH
Diamond Industry Stock Report
U.S. retailers take a beating after a disappointing start to Christmas shopping, except for Tiffany (+1%) and Nordstrom (0%). Far East shares mixed but Luk Fook (+14%) jumps. European shares largely unchanged except for Richemont (+2%). India shares mostly higher, led by Gitanjali (+14%) but tempered by C.Mahendra (-10%). Mining shares mixed, but ALROSA (+14%) hits a 52-week high. View the extended stock report.
Dec. 4 Nov. 26 Chng.
$1 = Euro 0.808 0.799 0.009
$1 = Rupee 61.92 61.77 0.1
$1 = Israel Shekel 3.95 3.87 0.08
$1 = Rand 11.20 10.96 0.24
$1 = Canadian Dollar 1.14 1.12 0.02
Precious Metals
Gold $1,206.10 $1,197.80 $8.30
Platinum $1,232.00 $1,226.00 $6.00
Stock Indexes Chng.
BSE 28,562.82 28,386.19 176.63 0.6%
Dow Jones 17,900.10 17,827.75 72.35 0.4%
FTSE 6,679.37 6,729.17 -49.80 -0.7%
Hang Seng 23,832.56 24,111.98 -279.42 -1.2%
S&P 500 2,071.82 2,072.79 -0.97 0.0%
Yahoo! Jewelry 1,255.79 1,239.28 16.51 1.3%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Hmmm a vraj sankcie fungujú😉
... Russia’s President Vladimir Putin and India’s Prime Minister Narendra Modi will inaugurate the World Diamond Conference taking place in New Dehli on December 11 and 12. Organizers confirmed that the two leaders will address the conference, forming part of Putin’s state visit to India.
The conference is being organized by India’s Gem and Jewellery Export Promotion Council (GJEPC), in association with the World Diamond Mark Foundation (WDMF) and with the support of India’s Ministry of Commerce and Industry and Al ROSA.
The event is aiming to deliberate the make-up of future consumer markets for polished diamonds and diamond jewelry, and to understand what tools and measures are needed to attract new generations of consumers, organizers explained.
A memorandum of understanding for direct rough diamond sourcing from ALROSA to India is expected to be signed during the conference.
Vipul Shah, chairman of the GJEPC noted that India and Russia are natural diamond partners given India’s position as a major diamond polishing hub and Russia’s investment in mining and exploration. “The visit of H.E. Vladimir Putin, President of Russia to India during the World Diamond Conference is of great significance and we are hopeful that the government of India [will] accept our proposals for direct sourcing and a special notified zone in India and [will] announce the revised structure at this forum,” Shah said.
During the actual conference, the first day will be dedicated to the various aspects of marketing diamonds and diamond jewelry. Ernie Blom, president of the World Diamond Fedaration (WFDB), Maxim Shkadov, president of the International Diamond Manufacturers Association (IDMA), and Edward Asscher , president of the World Diamond Council (WDC) will be among those addressing the conference on the opening day.
Representatives from De Beers, ALROSA, Rio Tinto, and Endiama will speak from the mining sector, along with government representatives from Zimbabwe and South Africa.
Alex Popov, Chairman of WDMF will give a perspective of joint industry, marketing strategies and initiative, followed by the insights of the world’s oldest jewellery brand – Mellerio dits Meller by President Emilie Mellerio. Other presentations will be given by members of the manufacturing, retail and banking sectors, among others, with the second day focused on challenges of industry financing. Details of the conference can be found at the following link: http://wdci.diamonds/
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment Dec. 12, 2014
Prime Minister Modi and President Putin open World Diamond Conference in New Delhi. ALROSA to raise rough supply to India as Mumbai gets special rough trading zone. Warning: Polished prices under severe pressure with sharp drop in trading as buyers demand lower prices. Some suppliers significantly lowering prices to raise cash as liquidity dries up. Markets unstable due to imbalance between rough and polished prices. De Beers rough price index +7% in 2014. Christie’s NY sale at $67M (75% by lot) with pear, 89.23ct., D, VVS1 selling for $11M ($124K/ct.). Sotheby’s NY sale at $44M (76% by lot) with 25.44ct., D, VVS1 selling for $3M ($117K/ct.). U.S. Oct. polished imports +1% to $2.2B.
RapNet Data: Dec. 11
Diamonds 1,553,544
Value $8,116,123,687
Carats 1,518,745
Average Discount -28.51%
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QUOTE OF THE WEEK
We are trying to get Russia to sell even more diamonds directly to us. Russia, being the biggest producer of rough diamonds in the world, and India, being the biggest center for cut and polished diamond manufacturing, are natural partners.
Vipul Shah | Gem & Jewellery Export Promotion Council
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INDUSTRY
Delhi Diamond Conference Boosts Trade Deals
Over the past month, Indias diamond industry scrambled to bring together global leaders in Delhi to coincide with a state visit from President Vladimir Putin, who met with Prime Minister Narendra Modi this week in an effort to strengthen India-Russia economic cooperation. The two world leaders signed a lengthy economic pact covering energy, technology and defense, among other sectors, and they addressed industry leaders at the inaugural World Diamond Conference India.
On the sidelines of the event, ALROSA signed long-term supply deals with 12 Indian diamond firms, reducing Indians reliance on the middleman and supplying about $2.1 billion of rough goods directly during the next three years. Modi called upon other major suppliers to sell direct to India to further minimize dependency upon Antwerp and Dubai. In addition, India announced it would create a special trade zone at the Bharat Diamond Bourse to import rough on consignment and re-export unsold goods. The Gem & Jewellery Export Promotion Council (GJEPC) has been actively lobbying for such a trading zone in order to compliment jewelry manufacturing and diamond polishing activity.
Representatives from Rio Tinto and the Forevermark brand recognized India as an increasingly important market for polished goods, as well. Stephen Lussier, the CEO of Forevermark, said that the emerging middle class is largely responsible for driving up diamond jewelry acquisition rates in India to 9% this year compared with only 2% in 2002.
Rio Tinto Diamonds managing director, Jean-Marc Lieberherr, said its flagship Indian marketing initiative, Nazraana™, which promotes affordable diamond jewelry as gifts for all occasions, remains a strong focus for the firm. Rio Tinto pans to develop the Bunder diamond project in Madhya Pradesh, offering a unique opportunity to produce diamonds that can later be manufactured and marketed on a commercial scale in the country.
RETAIL & WHOLESALE
U.S. Jewelry Store Sales -4%
Specialty jewelry store sales in the U.S. fell 3.9% year on year to $2.37 billion in October. The sharp drop was not as obvious in the preliminary jewelry and watch sales total during the month, which Rapaport News reported on November 28, reflecting a sector decline of just 0.6% to $5.461 billion. Still, specialty jewelry store sales have risen 3.3% to $24.733 billion for the first 10 months of 2014, while jewelry and watch sales across all channels were up by 2% to $49.7 billion, according to preliminary estimates.
Meanwhile, advanced sales estimates for U.S. department stores fell 0.7% to $16.844 billion in November, signaling a continued weakness for the big retail chains as a whole. Department store sales have fallen 2.4% to $144 billion during the first 11 months of the year.
In a separate report, MasterCard SpendingPulse concluded that Novembers retail sales rose 2.3% but the strongest sectors were lodging, hardware and restaurants. The group, which calculates aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, determined that U.S. consumers began the Christmas shopping season focused on friends and family rather than buying gifts. Total Thanksgiving weekend retail sales increased only 0.9%, Mastercard SpendingPulse stated, however, the group forecasts a strong late Christmas as total holiday spending should increase 5.5%. The group anticipates that consumer shopping should be much stronger over the weekend of December 13 and the week beginning December 21.
Provenance, Rarity Star at NY Jewelry Auctions
Jewelry sales this week from Sotheby’s and Christie’s in New York exceeded presale estimates and bidding was steady, although not highly competitive.
Sotheby’s sale on Tuesday totaled up $44,151,251 against a $37 million presale estimate with a sale comprised on very wearable jewels and pieces from collections with pedigreed provenance. The top lot of the sale was a platinum-topped gold and diamond necklace that was gifted to Helen Hay when she married Payne Whitney in 1902 — a headline society event of its day. The necklace sold to a European dealer who was in the room, but asked not to be identified, for $3,189,000. Some of the more competitive bidding of the day came about when the collections of cosmetics mogul Estee Lauder and her daughter-in-law, Evelyn H. Lauder, went on the block. A Cartier Tutti Frutti bracelet was the most sought after lot of the afternoon with seven bidders competing for the piece before it sold to a private Asian collector for $2,165,000 setting a world auction record for a Tutti Frutti bracelet by Cartier.
On Wednesday, Christie’s sale was characterized by more large diamonds including the 89.23-carat D/VVS1 pear shaped diamond on a black silk cord pendant. Estimated at $9 million to $12 million, it was the top lot of the day and contributed $11,085,000 to the sales grand total of $66,635,375 against a presale estimate of $55 million. The diamond was purchased by an anonymous buyer who was bidding on the phone. Both sales saw the same pattern of strong prices for great jewelry and rare stones, but there were a number of passes indicating that the market is becoming increasingly selective, yet willing to pay top dollar for top goods, or in some cases just something they really want.
U.S. Online Sales Jump
Online U.S. consumer spending rose 15% year on year to $35.499 billion for the November 1 to December 8 time period, according to comScore Inc. Green Monday, which fell on December 8 -- one week after Cyber Monday -- recorded sales of $1.6 billion, up 15% from one year earlier. So far this Christmas season, comScore recorded five days for which online consumer spending topped $1 billion. In addition, the group observed that sales growth has picked up since Thanksgiving, with online spending from desktops up about 18% year on year compared with growth of 13% during most of November.
NFC Enabled Pearl Debuts
Galatea: Jewelry by Artist unveiled its near field communication (NFC) empowered Momento Pearl™, defining it as the first cultured pearl to enable shared digital content on a compatible mobile device. Taking smart jewelry to the next level, Galatea implanted an NFC chip inside the pearl, where a tiny computer is powered by induction energy. Using the Galatea app, the user records a message or uploads an audio file to the jewel. By tapping the pearl against an NFC-enabled mobile device, the audio is played and other digital material may be displayed.
Jewelry that interact with a device is where the future of the industry begins, said Momento Pearl inventor and Galateas founder, Chi Huynh. "A person can live in this pearl forever, as it holds the voice and memories of a loved one." The complete collection of Momento Pearl jewelry includes 29 pendants, 26 earrings and eight rings in 14-karat gold with Tahitian and freshwater pearls.
GENERAL
Descheemaecker to Oversee HRD Temporarily
Serge Couvreur, the CEO of HRD Antwerp, ended his contract through a mutual agreement with the board and Marc Descheemaecker will assist the organization during a transition period. Descheemaecker is an independent member of the HRD Antwerp board and he will oversee the management team on a part-time basis until a new general manager is appointed. He will also act as chairman of the management committee. HRD Antwerp stated that the search process for a new CEO has already begun.
In addition, Pol Van der Steen resigned from the board and agreed to assist HRD Antwerp as a special technical consultant. He will contribute to the development of specialized diamond certification programs, according to the group.
Zimbabwe Wins a Round in Belgium Court
The Court of First Instance in Belgium ruled that approximately $45 million in proceeds from a Marange diamond tender that was held in Antwerp three months ago may be released to Zimbabwe, but not before late next week, according to The Herald. Amari Platinum Holdings Ltd. won an order against the Zimbabwe Mining Development Corporation (ZMDC) to seize the diamond revenue as part of a $500 million damage suit related to a canceled mining license. Attorneys for Zimbabwe, however, successful convinced the court that the diamonds and proceeds belonged to various miners in the Marange and not to the ZMDC.
But in an unrelated lawsuit, Dutch farmers are laying claim to the proceeds, too, in their $54 million case against Zimbabwe, for being forced off their properties through illegal government land reform. The court will reportedly weigh the results of the farmers case on December 18, according to The Herald.
Kerala Show Organizers Demand Justice
Organizers of the Kerala Gem & Jewellery Show seek an investigation into why 75 tax authorities raided the two-day business-to-business exhibit on December 7, upsetting exhibitors and attendees, causing chaos and charging exhibitors with infractions. The show, which has been operating since 2008, is not open to the public nor does it conduct sales. Officers confiscated exhibitors jewelry and started weighing the products for violations.
But in the end, organizers said only three out of 100 exhibitors were found with a minor violation, and even those were the result of miscalculations in the first place. Organizers were adamant that exhibitors and delegates operated within the law, produced required paperwork for exhibiting jewelry and gems, should not have been subjected to a raid and seek justice through an official, impartial inquiry.
MINING
ALROSA Expects Sales to Top $5B
ALROSAs supervisory board approved its 2015 budget and confirmed preliminary results for 2014. ALROSA anticipates having produced 36.1 million carats as of December 31, while total sales of rough and polished diamonds will have exceeded $5 billion. In 2015, ALROSA will continue to focus on its core diamond business and withdraw from nine businesses that are not in scope. ALROSA anticipates that production will improve to 38.2 million carats due, in part, to increased ore mining on the Mir and Udachny underground mines.
ALROSA also expects to reach design capacity at the Internatsionalny underground mine and begin production on the Botuobinskaya and Karpinskogo-1 pipes. Aggregate rough diamond sales in 2015, should reach about 40 million carats, according to ALROSA. The board approved ALROSAs long term development program, which extends to 2023 and anticipates increasing rough diamond production up to 41 million carats.
Rough Ruby Auction Achieves $689 Per Carat
Gemfields rough ruby auction in Singapore totaled $43.3 million for approximately 63,000 carats of predominately high-quality stones that were mined at the Montepuez concession in Mozambique. At $688.64 per carat, the auction realized the highest average price per carat as well as the greatest auction total to date for the gemstone mining and marketing firm. In addition, a 40.23-carat rough ruby -- named "Rhino Ruby" -- sold at this auction, but Gemfields did not disclose the price.
With two ruby sales under its belt, Montepuez auctions have generated $76.8 million in aggregate. Given the focus on higher-quality rubies at this second auction, all lots were offered on an "untreated basis," according to Gemfields, whereas the first auction in June tendered both untreated and treated material, using industry-accepted treatment techniques and full disclosures.
NDTC Pays $62M in Royalties
The Namibia Diamond Trading Company (NDTC) paid $8.7 million (NAD 100 million) in diamond dividends to the government, bringing the total payout this year to $61.5 million, according to the New Era newspaper. Namibias Minister of Mines and Energy, Isak Katali, claimed that the diamond industry represented the largest mineral royalty for the government. In addition, Katali confirmed that progress was being made on creating additional diamond cutting and polishing factories to further expand its beneficiation objectives, the report noted.
Stellar Secures Funding
Stellar Diamonds entered into a bridging loan agreement for up to $2 million with YA Global Master SPV Ltd. The funding will be available for three years and provides for two initial loan tranches of principal amounts of $250,000 each. The net proceeds of the two tranches will be used to support Stellars immediate working capital needs and operating expenses before the regular diamond exports and sales from the Baoulé project gets underway. In conjunction with the loan facility, Stellar entered into a $1.57 million (GBP 1 million) standby equity distribution facility with YA Global.
Lucara Posts 2015 Outlook
Lucara Diamond Corp. anticipates revenue of between $230 million and $240 million from the sale of 400,000 to 420,000 carats of rough diamonds in 2015, according to the companys outlook. Lucara recorded revenue of $180.5 million in 2013, and for the first nine months of 2014, sales have risen 60% year on year to $195 million. The junior miner expects that building and commissioning Karowes plant optimization project will be completed in the second quarter of 2015 at a total cost of $55 million; however, with most of the work already completed, Lucara has spent $40 million of that amount this year. Lucara stated that exploration costs in 2015 for two prospecting licenses will be between $7 million and $8 million.
STATS Israel
9 months $Mil. %Chng.
Polished exports $4,950 9%
Polished imports $3,200 5%
Net exports $1,750 8%
Rough imports $3,030 6%
Rough exports $2,450 9%
Net imports $579 -8%
Net diamond account $1,171 17%
U.S.A.
Oct. $Mil. %Chng. YTD $Mil. %Chng.
Polished imports $2,224 1% $20,286 5%
Polished exports $1,528 1% $17,923 10%
Net imports $713 1% $2,364 -22%
Rough imports $40 21% $502 26%
Rough exports $39 18% $337 39%
Net imports $1 $163 7%
Net diamond account $714 1% $2,527 21%
ECONWATCH
Diamond Industry Stock Report
Declines far outnumber gains in industry stocks this week. U.S. shares mainly lower except for Blue Nile (4%) after their PR comparing diamond prices; Far East shares lower, led by ValueMax (-7%). Europe all lower after several weeks of gains and India mainly lower with double-digit declines at C.Mahendra, Winsome and Vaibhav. Mining shares down across the board except for Dominion (+2%) and Firestone (+3%). View the extended stock report.
Dec. 11 Dec. 4 Chng.
$1 = Euro 0.807 0.808 -0.001
$1 = Rupee 62.54 61.92 0.6
$1 = Israel Shekel 3.92 3.95 -0.03
$1 = Rand 11.64 11.20 0.44
$1 = Canadian Dollar 1.15 1.14 0.01
Precious Metals
Gold $1,225.30 $1,206.10 $19.20
Platinum $1,236.00 $1,232.00 $4.00
Stock Indexes Chng.
BSE 27,602.01 28,562.82 -960.81 -3.4%
Dow Jones 17,596.34 17,900.10 -303.76 -1.7%
FTSE 6,461.70 6,679.37 -217.67 -3.3%
Hang Seng 23,312.54 23,832.56 -520.02 -2.2%
S&P 500 2,035.33 2,071.82 -36.49 -1.8%
Yahoo! Jewelry 1,241.67 1,255.79 -14.12 -1.1%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment Dec. 19, 2014
Warning: Polished prices under continued pressure with sellers lowering prices as demand for cash exceeds demand for diamonds. While some hot spots persist, overall market sentiment is negative. Rough prices coming down as sightholders reject about 20% of overpriced rough at estimated $600M De Beers Dec. sight. U.S. jewelry retailers hoping last-minute Christmas sales will boost mediocre holiday season. Widespread discounting with U.S. jewelry Nov. CPI -5%. Dominion’s 3Q revenue +50% to $222M, profit $34M vs. loss of $6.5M last year. Belgium’s Nov. polished exports -8% to $1B, rough imports +14% to $1.2B. Turkey scraps 20% diamond import tax and 18% VAT in bourse.
RapNet Data: Dec. 18
Diamonds 1,562,272
Value $7,908,764,022
Carats 1,514,768
Average Discount -28.6%
www.rapnet.com
QUOTE OF THE WEEK
The Panama Gem & Jewelry Center, the new home of the Panama Diamond Exchange (PDE), is ready for business, and right on schedule, we are happy to say. After detailed planning, a very ambitious building program and hard work by all concerned, it is possible to declare that our targets have been met. It is certainly the newest diamond and jewelry-dedicated structure on the face of this earth and also one of the most attractive.
Eli Izhakoff | Panama Diamond Exchange
Careers@Rapaport
The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.
INDUSTRY
De Beers Sight Estimated at $600M
De Beers December sight closed with an estimated value of $600 million. Minor adjustments to prices and assortments were reported in different categories, but no significant changes were noted. Sightholders and brokers reported that a large number of boxes were deferred, with the highest estimate of the amount of goods left on the table -- reaching 25%.
Sightholders observed a "sour mood" taking shape, especially since the previous two sights held prices up, further inhibiting profit growth on polished goods. De Beers contends that rough prices have increased 7% this year. De Beers temporarily relaxed sightholder rules to allow manufacturers that operate under beneficiation agreements to defer up to half their goods until the next sight. Alternatively, these manufacturers could choose to defer one box per rough category within a six-month period, as is traditionally the case.
De Beers said it had adjusted the rules in response to feedback from these manufacturers and that they would not be able to meet their plant production targets set earlier in the year in their intention to offer (ITO) agreements. The market for polished is currently weak, and overall rough trading on the secondary market is slow.
ALROSA Improves Liquidity
ALROSA held $3.6 billion in bank loans and public debt as of December 1, including debt maturing in 2015 -- $600 million of loans from VTB Bank, $348 million (RUB 20 billion) of commercial ruble bonds, series 20–23, and exchange-traded ruble bonds, series BO-01 and BO-02. To improve liquidity, ALROSA extended the repayment terms of outstanding loan contracts worth $600 million with VTB Bank until 2018. To create a liquidity source for repayment of commercial ruble bonds, series 20–23, and exchange-traded ruble bonds, series BO-01 and BO-02, ALROSA signed a $300 million loan contract with UniCredit Bank, maturing in 2017. ALROSA ensured repayment sources for short-term loans and borrowings to mitigate debt market access risks in 2015.
RETAIL & WHOLESALE
Jewelry Sales +12% in China
Chinas retail sales rose 11.7% year on year to $379.33 billion (CNY 2.35 trillion) in November, according to the National Bureau of Statistics of China. Retail sales for the first 11 months of the year were up 12% to $3.82 trillion. Online retail sales for the period have risen 55.9% to $62.35 billion. The government reported that retail sales of gold, silver and jewelry in November jumped 11.5% to $3.75 billion. However, the sector is down 0.7% year on year at $43.3 billion for the year-to-date and it was the only major retail category to record a sales decline.
U.S. Jewelry Price Index Drops
The U.S. consumer price index (CPI) for jewelry declined 5% year on year to 166 points in November and the reading slipped about 5 points from Octobers index. Jewelry price inflation often reflects heavy promotional activity at the retail counter during November and December due to the Christmas shopping season; however, this November drop of 8.81 points from one year ago was the steepest since records began in 1986. The CPI for watches, meanwhile, was flat in November at 121.33 points, but the reading was 3 points lower than Octobers index.
Market prices for precious metals and diamonds during November remained under pressure with platinum prices running about 9% lower than one year ago, while gold prices were basically flat. However, the RapNet Diamond Index (RAPI™) -- the global benchmark for polished prices -- plummeted 7.5% year on year for 1-carat diamonds. RAPI for 3-carat diamonds fell 5.5% and RAPI for 0.30-carat diamonds slipped 0.4%, but RAPI for 0.50-carat polished goods increased 3.2% compared with one year ago.
Jewelry Gifts Score With 17% of U.S. Shoppers
Slightly more than 9% of U.S. consumers who purchase gifts for the Christmas festival have completed their shopping, according to an updated survey conducted by Prosper Insights & Analytics for the National Retail Federation (NRF). Overall, consumers said that a little more than half of their shopping was completed as of December 10.
Across all gift categories, 17% of shoppers confirmed that they had already purchased a jewelry gift (or precious metal accessory) for Christmas. The figure was off by one-half a percentage point from December 2013 and down from 20.8% in December 2012. Jewelry gift spending was roughly the same for all demographic groups -- in the range of 15.1% to 18.7% -- with the exception of those 25 to 34 years of age for which 23.5% have already made a jewelry purchase. The most popular gift purchases, so far, have been clothing (51.3%), toys (36.3%), books, CDs, DVDs or video games (35.1%) and gift cards or certificates (33.5%), according to the study.
Online Sales +15% in U.S.
U.S. online retail sales rose 15% year on year to $42.451 billion for the first 44 days of the Christmas season, through December 15, according to digital metrics firm comScore Inc. The most recent workweek, beginning with December 8, which is called Green Monday, posted a 12% increase as sales totaled $8.618 billion from desktop spending. The period also marked a second consecutive week with all five workdays reaching sales of at least $1 billion, comScore stated.
Anticipated December Jewelry Spending Flat
IBISWorld anticipates that U.S. Christmas season gift spending will increase 1.8% year on year to $54.79 billion in December. Jewelry and accessory gift spending is expected to increase 0.2% to $5.51 billion this month compared with one year ago. The personal care and cosmetics segment is expected to have the largest increase, up 3.3% to $5.7 billion. Total spending on gifts, food and decorations should increase 2% to $70.9 billion in December, according to the group. IBISWorld concluded that consumers are likely to hold back on buying extravagant gifts and that heavy retail promotions have backfired as the Internet reduces the need for consumers to rush to find good offers.
Birks Closes $33M Loan
Crystal Financial LLC, a portfolio company of Solar Capital Ltd., closed a $33 million second-lien term loan for jewelry retailer Birks Group that matures in August 2018. The facility refinanced a Birks Group existing term loan and provided additional flexibility to the jeweler as it continues to implement growth plans, open new stores and launch new merchandise offerings.
R2Net - JamesAllen Secures $25M
R2Net - JamesAllen.com secured $25 Million in funding from Israel Growth Partners (IGP). The funds will be used in support of R2Net’s aggressive growth strategy, following the acquisitions of Segoma Inc. and Brio Animation Studio Ltd. and launch of JamesAllen.coms store-in-store joint venture with Sears. JamesAllen.com seamlessly integrates smart phones, tablets and PCs, as well as virtual kiosks, which enables the digital generation to easily shop for diamond jewelry. R2Net also operates a business-to-business platform for online diamond sales.
Gabriel & Co. Debuts New Collections
Gabriel & Co. unveiled five new fine jewelry collections, curated by its global Style director, Hal Rubenstein, at Padis Jewelry in San Francisco. Each piece is hand made with 14- and 18-karat gold, sterling silver, diamonds and colored gemstones. Rubenstein designed the jewelry to seamlessly transition between day and evening wear, under the philosophy that beautifully crafted jewelry is not to be stored and saved for specific occasions, but worn every day.
Bulgaris Click-and-Collect Starts at Selfridges
Bulgari launched an exclusive click-and-collect partnership with Selfridges flagship London store on December 11 to provide customers with the opportunity to purchase Bulgari products online, via Selfridges ecommerce platform, and collect the items in the store. Some of Bulgaris most iconic collections are available, including Diva, MVSA, Serpenti and B.Zero1. The most expensive item available so far is Bulgaris Serpenti diamond necklace, which retails for $110,000. Selfridges stated that this new partnership enhances its omnichannel strategy.
Nouvo Mode Partners With Frederick Goldman
Frederick Goldman Inc. appointed Nouvo Mode to represent it in Canada with a sales and distribution agreement for the Goldman, ArtCarved and TRITON brands. Nouvo Mode is a full-service sales and marketing organization that plays a strategic role in the development and growth of designer brands within the luxury market. Created in 2007, Nouvo Mode has established itself as a growing force and currently they represent Alex and Ani, Ernst Benz, Scott Kay, Hera, Breuning and more.
GENERAL
Turkey Ends Polished Diamond Tax
Turkey abolished a 20% special consumption tax on polished diamonds with a new tax regime that passed in September. In addition, polished diamonds being traded in Borsa Istanbul Diamond and Precious Stone Market is exempted from an 18% value added tax (VAT). Diamonds traded in Turkey outside of the exchange will be subject to the VAT. The Borsa Istanbul, which has 122 members, expects that its membership will increase as a result of the new tax scheme since it encourages company registration.
AWDC Prepares Cote dIvoire for Rough Exports
The Antwerp World Diamond Centre (AWDC) is helping Cote dIvoire adhere to the Kimberley Process and resume their diamond trade. The AWDC trained three Ivorian senior officials to become diamond experts and gain the necessary knowledge to estimate diamond values. In addition, officials were briefed on the stringent regulations of the Kimberley Process. Cote dIvoire was banned from exporting rough until just this year after a decade of violence came to an end. Cote dIvoire will launch its new controls on January 1 and the country has the potential to produce between 150,000 to 200,000 carats of rough diamonds annually, representing a value of $25 million.
Panama Center Welcomes New Tenants
The Panama Gem & Jewelry Center welcomed 14 trading firms in the first phase of its new building. The center expects 45 multinational firms to eventually occupy the space. Among the major diamond companies taking up residence are Kiran Gems, Diarough NV, Rosy Blue, Bhavani Gems, Interjewel, Jewelex, M. Suersh, the Niru Group, ILI Diamonds of the A. Rachminov Group, Atit Diamonds of the Shairu Gems, Dianco, Ofer Mizrahi Diamonds, S. Schnitzer Diamonds and S. SB Bichachi Diamonds Group.
In addition, the Panama Diamond Exchange (PDE) and CIBJO joined forces to provide educational programs for the gemstone and jewelry sectors across Latin America, instilling the principles of corporate social responsibility.
Two Executives Depart Gucci
Patrizio di Marco, the CEO of Gucci, will leave the luxury brand on January 1 and be succeeded by Marco Bizzarri. His notice of departure comes a week after the resignation of Michele Sofisti, the CEO of Guccis jewelry and watch division. Marco was appointed to serve as interim head of jewelry, while Gucci recruited a replacement for Sofisti. In addition, the creative director of Gucci, Frida Giannini, announced her departure for the end of February after showing the fall and winter 2016 womens wear collection on February 25. A new creative director will be appointed at a later date, according to parent company Kering.
MINING
Dominion Diamonds Profit Reaches $34M
Dominion Diamond Corporation reported that production, sales and profit were all stronger than expected during the third quarter that ended on October 31. Profit rose to $33.6 million compared with a loss of $6.5 million one year ago. Consolidated net income attributable to shareholders totaled $25.5 million or 30 cents per share. Rough diamond sales jumped 50.1% to $222.3 million, cost of sales rose 7.3% to $147 million and gross margin increased to 33.9% compared with 8% one year earlier.
Diaviks diamond sales rose 52% to $80.4 million, although the average price fell $2 to $116 per carat. Ekatis diamond sales rose 49% to $141.9 million with an average price of $310 per carat. Dominion Diamond stated that it had unrestricted cash and cash equivalents of $288.8 million as of October 31 and restricted cash of $112 million. Rough diamond inventory totaled 1.9 million carats, with a market value of approximately $350 million, of which approximately $185 million represented inventory available for sale, with the remaining $165 million being sorted. Working capital totaled $629.5 million, up from $572.1 million as of January 31.
Lucapa Prepares Lulo; Plans Rough Sale
The Lucapa Diamond Company will being mining next month at its Lulo alluvial concession in Angola, where the miner plans to target high-grade diamond ore bodies. During the first phase, Lucapa anticipates that ore bodies hold approximately 35 carats per 100 tonnes (cpht), while the Lulo project overall reflected ore-grade of 26 cpht, with a large proportion of type IIa stones.
Lucapa plans to sell a third parcel of Lulo diamonds, containing more than 1,000 carats, in February through the Angola diamond marketing agency, SODIAM. The largest stone the sale will offer is a 10.15-carat, type IIa that is valued at more than $180,000, or close to $18,000 per carat. To date, Lucapa has sold two parcels of Lulo rough stones, consisting of 867 carats, for $4.9 million (AUD 6 million), at an average price of close to $5,700 per carat.
Stornoways Earnings Reach $12M
Stornoway Diamond Corporation recorded net earnings of $11.7 million in the second fiscal-quarter that ended on October 31, compared with a loss of $1.6 million one year earlier. Net earnings were impacted by line items that were not reflective of underlying operating performance, including changes in the fair value of a derivative and unrealized gains and losses from foreign exchange rates. Cash and cash equivalents fell to $387.9 million compared with $438.3 million at the end of the previous quarter; however, cash resources remained sufficient to cover planned mine development expenses at the Renard diamond project and financing and corporate costs during calendar year 2015.
Construction mobilization at Renard continues to proceed rapidly, with incurred costs and commitments at the close of the second quarter totaling $179.7 million, or 22.1% of budget, according to the company.
Rockwells Sales +47%
Rockwell Diamonds reported that revenue improved 47% year on year to $15.76 million in the third quarter that ended on November 30. Earnings will be reported on January 13, 2015. The junior miner sold 13,759 carats during the period, reflecting an average price of $1,146 per carat, which was 35% lower from one year earlier. The company stated that the average price per carat was lower, in part, because there were fewer large diamonds in the sales mix. Diamond production rose 15% to 10,228 carats in the third quarter.
STATS Belgium
Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,045 -8% $13,331 4%
Polished imports $932 -7% $12,894 4%
Net exports $113 -17% $437 9%
Rough imports $1,239 14% $13,879 14%
Rough exports $1,409 9% $14,439 9%
Net imports ($170) ($560)
Net diamond account $284 -16% $997 -36%
ECONWATCH
Diamond Industry Stock Report
U.S. retailers somewhat higher as investors hope for a last-minute consumer shopping burst, JCP (+12%), Blue Nile (+6%) leading gains. Far East and European shares under pressure except for Luk Fook (+3%) and Damiani (+3%). Indian shares mainly lower, led by Rajesh Exports (-12%). Mining shares mixed with Stornoway (+11%) way ahead, and Stellar (-6%) and Peregrine (-6%) leading declines. View the extended stock report.
Dec. 18 Dec. 11 Chng.
$1 = Euro 0.814 0.807 0.007
$1 = Rupee 62.99 62.54 0.5
$1 = Israel Shekel 3.94 3.92 0.02
$1 = Rand 11.56 11.64 -0.08
$1 = Canadian Dollar 1.16 1.15 0.01
Precious Metals
Gold $1,198.20 $1,225.30 -$27.10
Platinum $1,195.00 $1,236.00 -$41.00
Stock Indexes Chng.
BSE 27,126.57 27,602.01 -475.44 -1.7%
Dow Jones 17,778.27 17,596.34 181.93 1.0%
FTSE 6,466.00 6,461.70 4.30 0.1%
Hang Seng 22,832.21 23,312.54 -480.33 -2.1%
S&P 500 2,061.23 2,035.33 25.90 1.3%
Yahoo! Jewelry 1,230.53 1,241.67 -11.14 -0.9%
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
USPTO Approves Orchidea, Whos Your Jeweler? and Lux Crown Trademarks
RAPAPORT... The U.S. Patent & Trademark Office (USPTO) issued the trademark "Orchidea" to Lili Diamonds of Israel on December 9 with the registration number 4651030. Lili Diamonds filed for the trademark on December 23, 2013 to represent a brand of diamonds, gemstones and jewelry, but "Orchidea" excludes watches, according to the filing.
Yisroel Feder of Clifton, New Jersey, received the trademark "Whos Your Jeweler?" from the USPTO on December 9 with registration number 4652426. Feder filed for the trademark on April 28 and it applies to online and in store retail store services that feature jewelry.
The USPTO issued the trademark "Lux Crown" to La More Design Inc. of New York on December 16 with registration number 4656086. La More Design filed for the trademark on May 5 as it describes the companys diamonds, gemstones, gold and jewelry products.
In India, the Office of The Trade Marks Registry issued the trademark "Ganesh & Co. Jewellers" on December 8 with registration number 1700722. Ganesh & Co. Jewellers filed for the trademark on June 19, 2008 and has been using the name in commerce since November 3, 1943 as a manufacturer of jewelry that is made with silver, gold, diamonds and precious gemstones.
Múdry sa teší objaveniu pravdy, hlupák falošnosti.
Rapaport Weekly Market Comment Dec. 24, 2014
Diamond trading centers going on holiday. Dealers adjusting their expectations to meet new realities. Global demand is weak and there is an oversupply of diamonds throughout the distribution chain. Buyer’s market prevails with great opportunities for aggressive traders willing to take positions. Healthy U.S. market supporting the industry. U.S. sentiment improves as Dow surpasses 18,000, reaching record high after economy surges +5% in 3Q. U.S. Nov. jewelry sales +2% to $6.3B. Indias Nov. polished exports +11% to$1.6B, rough imports +35% to $1.5B. The Rapaport Group wishes everyone a happy, healthy, prosperous and peaceful New Year.
RapNet Data: Dec. 24
Diamonds 1,525,694
Value $7,948,070,542
Carats 1,447,589
Average Discount -28.67%
www.rapnet.com
Get Current Price List | Subscribe to Rapaport | Join RapNet
RAPAPORT ANNOUNCEMENTS
January 13-21 Tue-Wed
Rapaport Melee Auction
New York & Dubai
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January 14-21 Wed-Wed
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QUOTE OF THE WEEK
U.S. consumers love a deal and want to feel special for having spent their money with you. The go-to retailer today simplifies a shoppers life and preserves the consumers penchant for things with some level of quirkiness. Big box stores and brands make consumers offers they cannot refuse, so you must do the same and believe that your store can compete.
Frank Rich | Encore Príst Intl.
The Rapaport Group is growing rapidly. If you wish to work with the best and brightest, join us. We have great opportunities for trading managers, gemologists, sales assistants and entry-level positions for our offices in New York, Antwerp and Mumbai. View jobs now.
INDUSTRY
Swiss Watch Exports -4%
Swiss watch exports declined 4% year on year to $2.14 billion (CHF 2.06 billion) in November as exports to Asia and Europe fell. Wristwatch exports decreased 4% to $2.01 billion, while other timepiece exports dropped 13% to $120.7 million. All major export categories of watches dropped by value during the month, with the steepest decline noted for exports of watches made from non-metallic materials -- down 18% to $46.1 million. The second largest drop occurred for gold-steel watches, which fell 8% to $260.5 million, while exports of gold watches dropped 2% to $801.1 million.
U.S. Jewelry, Watch Sales +1%
U.S. jewelry and watch sales across all channels rose 1.4% year on year in November, according to preliminary government estimates. While the increase was disappointing compared with the previous two years, Novembers data is still subject to revisions in the months ahead. Jewelry and watch sector sales rose 4.9% in November 2012 and 6.5% in 2013. Jewelry and watch sales totaled $7.128 billion in November, according to Rapaport News estimates. The sectors total has risen 2.1% to an estimated $63.58 billion for the first 11 months of the year.
Specifically, jewelry sales rose 1.5% year on year to $6.272 billion in November, following a 0.5 percent contraction in October. Jewelry sales have risen about 2% to $55.95 billion during the first 11 months of the year. Watch sales improved 0.9% to $855 million in November, following a 1.6% decline in October. Watch sales have risen almost 2.5% to $7.63 billion in the first 11 months of the year.
RETAIL & WHOLESALE
Retailers Note Higher Rates of Organized Crime
Loss prevention executives estimated that organized retail crime groups in the U.S. will cost the industry $3.8 billion in fraudulent returns this Christmas season and $10.9 billion for the entire year, according to the National Retail Federation (NRF) 2014 Return Fraud Survey. The NRF noted that 92.7% of retailers have experienced the return of stolen merchandise in the past year, which is down from 94.8% 2013; however, the survey confirmed that 78.2% of retailers experienced return fraud through organized retail crime groups, up from 60.3% one year ago.
U.S. Online Retail Sales +15%
U.S. Christmas-season ecommerce spending rose 15% to $48.3 billion from November 1 through December 21, according to comScore Inc. The most recent week (December 15 to 21) posted a strong 18% rate of growth, representing $5.8 billion in ecommerce spending as tracked from desktops, according to the group. Even with the heaviest spending days completed, there is still another $5 billion in seasonal spending that comScore expects will further boost retail sales before the end of December.
New Jersey Identifies Cash-For-Gold Violations
The New Jersey State Office of Weights and Measures identified 10,000 violations at 71 jewelry stores in connection with cash-for-gold schemes. The most recent round of investigations also resulted in the state confiscating 35 unauthorized scales from jewelers who were using them to weigh gold. There were some alleged cash-for-gold violations at locations not associated with jewelry, including at a bail bonds business and a sneaker store. New Jersey doesnt prohibit businesses from offering to buy jewelry from consumers, as long as they comply with all applicable rules.
Winsome to Close Goa Operation
Embattled Winsome Diamonds and Jewellery Ltd. informed the Bombay Stock Exchange (BSE) that the diamond companys board approved closing its industrial operation in Goa. The board met on December 20 and passed the measure with a majority in favor, according to the filing.
On December 22, the BSE filed a notice seeking clarification from Winsome Diamonds on the rationale behind the decision and the benefits and/or impact from closing the operation.
Small Biz Hopeful; Shoppers Value Local
Small business retailers in the U.S. reported a net negative 4% change in the number who recorded sales increases during the past three months, according to the NFIB. However, business owners were more optimistic about expected sales gains heading into December. The NFIBs general business conditions index jumped to 13 points at the first of the month, the highest level for Christmas season since 2010.
Meanwhile, numerous small-town newspapers across the U.S. have been reporting on an increasingly popular consumer trend to "shop local" and avoid big name stores, and crowds, for gift shopping this year. Analysts surmise that with a recession mentality still firmly planted in the U.S., consumers are seeking a higher level of satisfaction from gift buying by supporting local retailers that offer unique items.
Strive to be a Digital Genius
L2 Business Intelligence for Digital ranked 82 jewelry and watch brands for an annual IQ Index report that measured the success of each retailers omnichannel implementation. The highest rating L2 defines is "genius," or those brands with an omnichannel competence that differentiates it from the competition and consistently delivers a high-performance, seamless digital mindset across ecommerce, social media and marketing.
The "genius" score was earned by David Yurman, Tiffany & Co., Alex and Ani and Swarovski, and together these brands set the bar for where jewelers need to be. The next level, which is admirable, is "gifted" and these brands are experimenting and innovating across the digital channel with a consistent presence and marketing tone. Some of the "gifted" brands included Van Cleef & Arpels, Chopard, Cartier, Pandora, Hearts On Fire, Movado and De Beers.
L2s "average" digital IQ score was earned by brands -- including Boucheron, Birks, Mikimoto and Rolex -- that are simply functional and predictable, while being siloed by the retailers platform. The bottom two categories, "challenged" and "feeble," have much room to improve as they only offer limited ecommerce or none at all and struggle to reach a cohesive digital presence. Some of the challenged brands included Chaumet, Fabergé ad Harry Winston, while a couple of the big brands under "feeble" included Graff and H.Stern.
U.S., India Assign Trademarks
The U.S. Patent & Trademark Office (USPTO) issued the trademark "Orchidea" to Lili Diamonds of Israel on December 9, with registration number 4651030. Yisroel Feder of Clifton, New Jersey, received the trademark "Whos Your Jeweler?" from the USPTO on December 9 with registration number 4652426. The USPTO also issued the trademark "Lux Crown" to La More Design Inc. of New York on December 16, with registration number 4656086.
In India, the Office of The Trade Marks Registry issued the trademark "Ganesh & Co. Jewellers" on December 8, with registration number 1700722. Ganesh & Co. Jewellers filed for the trademark on June 19, 2008 and has been using the name in commerce since November 3, 1943 as a manufacturer of jewelry that is made with silver, gold, diamonds and precious gemstones.
MINING
Mountain Province Lists on the Nasdaq
Mountain Province Diamonds Inc. was approved for listing its shares on the Nasdaq under the symbol "MDM." The junior miners common stock will continue to trade on the New York Stock Exchange until December 30. Mountain Province Diamonds trades on the Toronto Stock Exchange under the ticker symbol "MPV.TO."
In other news, De Beers Canada Inc. and Mountain Province, joint partners in the Gahcho Kué diamond project, entered into an impact benefit agreement with the Deninu Kue First Nation people. The agreement outlines a framework to develop economic, environmental and cultural programs with Deninu Kue First Nation members and it marks the final arrangement with local residents that is required for exploration projects in the region.
Peregrine to Raise $2M
Peregrine Diamonds Ltd. announce a non-brokered private placement of 10,441,189 common shares at a price of 21 cents per share for gross proceeds of $2,192,649. Proceeds from the placement will be used for Peregrine Diamonds mineral exploration projects in Canada. The placement is subject to regulatory approval.
Lucara to Divest From Mothae
Lucara Diamond Corp. announced plans to sell its 75% stake in the Mothae diamond mine in Lesotho. While the project held diamonds, all development options for the site had failed to meet the companys investment criteria. The current book-value of the project, along with rehabilitation provision costs, was close to $21 million, according to Lucaras estimates. Lucara added that the government, which owns 25% of Mothae, indicated that it was committed to support the project should any potential new owners express interest to buy.
Kelvin Grade Improves
Kennady Diamonds Inc. recorded a grade of 2.59 carats per tonne of ore from its Kelvin summer/fall mini-bulk sample program, an increase of 40% from the diamond grade recovered from a 25 tonne mini-bulk sample earlier in the year. The summer/fall sample was recovered by drilling at the north lobe of the Kelvin kimberlite and was processed by dense media separation at the Geoanalytical Laboratories Diamond Services of the Saskatchewan Research Council.
Diamcor to Raise $3M
Diamcor Mining Inc. intends to complete a private placement on a brokered and non-brokered basis of up to 3 million units at a price of 86 cents (CAD 1) each for gross proceeds of up to $2.6 million (CAD 3 million). Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one share at an exercise price of CAD 1.25 for a period of 36 months following the date of issuance.
The offering is subject to the approval of the Toronto Stock Exchanges venture exchange. Proceeds will be used to support the continued advancement of Diamcors Krone-Endora at Venetia diamond project in South Africa, the acquisition of additional operational items aimed at enhancing the effective treatment of larger material in the +26.0mm size fractions, and for general and administrative purposes.
STATS India
Nov. $Mil. %Chng. YTD $Mil. %Chng.
Polished exports $1,559 11% $20,758 7%
Polished imports $882 125% $7,092 9%
Net exports $677 -5% $13,666 6%
Rough imports $1,545 36% $16,102 10%
Rough exports $94 19% $1,389 -17%
Net imports $1,451 37% $14,713 13%
Net diamond account ($774) ($1,047)
ECONWATCH
Diamond Industry Stock Report
Retailers mainly flat except for Birks (+13%) and Charles & Colvard (+16%). Indian shares all lower except for Vaibhav Gems (+5%). ALROSA (+11%) led mining share gains. Gold closed down $23 an ounce this week to $1,174.90 before the market closed for the Christmas holiday. View the extended stock report.
Dec. 24 Dec. 18 Chng.
$1 = Euro 0.820 0.814 0.006
$1 = Rupee 63.47 62.99 0.5
$1 = Israel Shekel 3.93 3.94 -0.01
$1 = Rand 11.65 11.56 0.09
$1 = Canadian Dollar 1.16 1.16 0.00
Precious Metals
Gold $1,174.90 $1,198.20 -$23.30
Platinum $1,185.00 $1,195.00 -$10.00
Stock Indexes Chng.
BSE 27,208.61 27,126.57 82.04 0.3%
Dow Jones 18,030.21 17,778.27 251.94 1.4%
FTSE 6,609.93 6,466.00 143.93 2.2%
Hang Seng 23,349.34 22,832.21 517.13 2.3%
S&P 500 2,081.88 2,061.23 20.65 1.0%
Yahoo! Jewelry 1,244.60 1,230.53 14.07 1.1%
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