Určite ,ale v inom svetadiely . 😃

Rapaport Weekly Market Comment November 12, 2015

Rough trading freezes as sightholders defer most goods at unprecedented $70M De Beers sight with factories closing for extended Diwali break. Shortages developing before important U.S. holiday season which is reducing sales. High price to pay for high prices. Chinese single’s day (11/11) online sales lift Far East sentiment (1derful). Chow Tai Fook cautions 1H profit -50% on weak HK market. Richemont 1H jewelry sales +18% to $3.4B. Sotheby’s nets $141M (83% by lot) with cushion, 12.03ct., fancy vivid blue, IF diamond selling for $48.5M ($4M/ct.). Christies fetches $109M (80% by lot) as cushion, 16.08ct., fancy vivid pink, VVS2 diamonds sells for $28.5M ($1.8/ct.). Happy Diwali.

RapNet Data: November 11

Diamonds 1,189,157
Value $8,158,941,701
Carats 1,324,505
Average Discount -28.55%

www.rapnet.com

The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

Get Current Price List | Subscribe to Rapaport | Join RapNet

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QUOTE OF THE WEEK
We recognize that there are challenges in the industry and that we’re still in a destocking period. So our focus was to be flexible to meet sightholder needs.

David Johnson, head of midstream communications at De Beers, on flexibility at the November sight

MARKETS 	  

United States: Steady polished trading but suppliers still waiting for holiday upswing. Buyers pushing for higher discounts and getting better prices in Mumbai than New York. Good deals for cash buyers...

Belgium: Polished trading quiet with slow demand. Indian dealers away for Diwali. Sentiment improving in anticipation of Christmas holiday season. Good demand for 0.25-1ct., G-J, VVS-SI diamonds...

Hong Kong: Some improvement as Nov. 11 “single’s day” special online deals keep diamond traders busy. Indian buyers and suppliers off the market for Diwali...

India: Market sentiment weak as trading halts for Diwali break. Mumbai dealers away for a week (Nov. 7-13) and factories to remain shut until end of the month...

Israel: Trading quiet for this time of year. Buyers looking for deals at lower prices with suppliers compromising on inventory that’s hard to sell. Dealers focused on filling U.S. holiday orders...

Click here to continue reading

INSIGHTS 	  

Beautiful Diamonds that Sell in Any Market

The hype surrounding Sotheby’s and Christie’s auctions in Geneva this week created a buzz in the diamond trade that is otherwise starved for excitement...

Click here to continue reading

INDUSTRY 	  

U.S. Polished Diamond Imports -23% in September

U.S. polished diamond imports fell 23% year on year to $1.6 billion in September, the second-lowest monthly figure so far this year. Diamond imports by weight fell 19% to 923,229 carats, at an average price of $1,774 per carat. Polished diamond exports, meanwhile, fell 17% to $1.5 billion, driving net imports down 37% to $178.1 million. In August, imports were $1.6 billion.

Rough diamond exports soared 199% to $14.9 million, while rough imports increased 16% in September to $34.8 million, leaving net rough imports down 21% at $19.9 million. The net diamond account, reflecting the difference between net imports and exports, dropped 50% to $398.8 million.

De Beers Sight Slumps to Estimated $70M

De Beers recorded one of its smallest ever contract sales in November as the November sight closed with an estimated value of $70 million. The rough diamond supplier kept prices stable and enabled extra flexibility due to the slump in sightholder demand.

“It was a small sight as we expected because of the Diwali holidays,” said David Johnson, head of midstream communications for De Beers. “We recognize that there are challenges in the industry and that we’re still in a destocking period. So our focus was to be flexible to meet sightholder needs.”

Sightholders could defer their entire November allocations to December, or bring their December supply forward, among other options. Most chose to defer.

Belgium’s Polished Exports -27%

Belgium’s polished diamond exports fell 27% year on year to $929 million in October, according to data from the Antwerp World Diamond Council. By volume, polished exports dropped 14% to 484,158 carats, while the average price of the exports decreased 15% to $1,919 per carat.

Polished imports fell 25% to $880 million in October and the country’s net polished exports, representing the excess of exports over imports, tumbled 51% to $49.4 million.

Rough imports dropped 14% to $962 million during the month, while rough exports increased 1% to $1.01 billion. Net rough imports, representing imports minus exports, fell to negative $48.9 million compared with a surplus of $121 million one year earlier.

The country’s October net diamond account, or total exports of rough and polished less total imports, was positive $98.2 million compared with a deficit of $20 million in October 2014.

Sarine Posts 3Q Loss, Revenue -53%

Israel’s Sarine Technologies, a diamond manufacturing equipment maker, reported revenue fell 53% in the third quarter to $9.5 million in the period to September 30. It posted a loss of $1.4 million, compared with a profit of $5.7 million a year ago. Revenue from India, the largest contributor to sales, plummeted 64% to $6 million.

Results were dampened by higher prices of rough and increased polished inventory, which impacted business activity, the company said. Performance was particularly affected by the disappointing De Beers’ July and August sights and ALROSA’s September tender, it added.

DDC Expands Arbitration to Cover Disputes with Non-Members

Members of the Diamond Dealers Club (DDC) of New York will be able to use the organization’s arbitration services to resolve disputes over transactions with non-members following an expansion of the service.

DDC members can now take cases to the trade group’s arbitration program by putting an arbitration clause into memos or invoices, or on their letterhead, the DDC said in a statement.

The move is aimed at increasing the safety and efficiency of diamond and jewelry transactions, the statement said.

RETAIL & WHOLESALE 	  

Blue Moon Sold for Record $48.5M

Sotheby’s has auctioned the 12.03-carat Blue Moon diamond for $48.5 million, or $4 million per carat, setting what the auctioneer claims is a world record for a diamond of any color.

The internally flawless diamond sold at a Sotheby’s sale in Geneva on November 11, breaking the previous record set when the auction house sold the 24.78-carat Graff Pink diamond for $46.2 million in the same city in 2010. It was expected to go for between $35 million and $55 million. The stone was sold by New York jewelry company Cora International to a Hong Kong-based buyer, later reported to be Hong Kong real estate investor Joseph Lau. The previous day, he purchased the 16.08-carat ‘Sweet Josephine’ pink diamond for $28.6 million at Christie’s auction (see story).

Total sales at Sotheby’s auction were $139.1 million, with 83% of lots sold.

Christie’s Sells Pink Diamond for $29M

Christie’s sold a 16.08-carat pink diamond for $28.6 million (CHF 28.7 million) at its auction in Geneva on November 10.

The large stone with a rare pink hue, set in a platinum and gold ring surrounded by a double row of pavé-set white diamonds, was sold to an unidentified Chinese client based in Hong Kong, who renamed it ‘Sweet Josephine.’ Its pre-sale estimate was $23 million to $28 million. The origin of the diamond and the identity of its seller were not disclosed.

Pandora’s Revenue +37%

Danish jewelry retailer Pandora’s revenue jumped 37 percent to $563.7 million (DKK 3.9 billion) year on year in the third quarter that ended September 30.

The company closed 116 unbranded stores in the Americas during the third quarter, mostly in the US, it said. The overall number of points of sale in the Americas was cut by 212, or 6 percent, to 3,124, compared with the third quarter last year. Globally, the number of points of sale dropped by 308 to 9,533.

Ring sales jumped 79 percent to $88.7 million.

Gitanjali’s Profit, Revenue Surge

India’s Gitanjali Gems sales surged 40% to $520.5 million (INR 34 billion) in the second quarter. Profit soared 113% to $6.2 million in the three months to September 30, the company said in a statement.

However, diamond sales slumped 30% to $99 million and profit from the diamonds division plunged 65% to $1.2 million. Revenue from the jewelry segment surged 71% to $42.8 million, the statement said. Overall revenue from India jumped 69% to $216.8 million and sales from the rest of the world grew 25% to $303.8 million.

Revenue increased 39% to $948.6 million for the half year to September 30, the company said.

Chow Tai Fook Expects Profit Drop

Hong Kong-based Chow Tai Fook, the world’s largest listed jeweler, warned its profit for the six months ended September 30 could be half of the comparable period last year due to weak consumer sentiment in Hong Kong and Macau, according to a statement to the Hong Kong stock exchange.

The jeweler said it also expects to report lower gross profit margins due in part to a change in its product mix with an increased sale of gold products. The company expects to report results for the period on November 24.

Christie’s To Auction Thatcher’s Diamond Jewelry

Former UK Prime Minister Margaret Thatcher’s emerald and diamond necklace by Chaumet, dating back to about 1930, will be among the items Christie’s will auction next month in London.

Christie’s will tender the piece valued at $181,200 (GBP 120,000) to $271,900 alongside 150 other items from the Iron Lady’s collection on December 15, it said on its website.

A George III pavé-set diamond flower brooch from the 1800s, comprising old cushion, pear and circular-cut diamonds, will also be on sale. Its value is expected to be $12,100 to $15,100. A further 200 lots will be available in online-only bids from December 3 to December 16.

Sotheby’s Revenue +46%

Sotheby’s revenue increased 46 percent to $137.9 million year on year in the third quarter that ended September 30. The net loss was cut 35 percent to $17.9 million, or 0.26 per diluted share, the auctioneer said in a statement.

The company also said net auction sales increased 15 percent because of a change on its events calendar. Auction commission revenues decreased, largely due to significantly weaker sales in higher-margin categories, including jewelry.

Shrenuj’s Diamond Sales +19%

Shrenuj & Company Ltd. reported that sales increased 16 percent to $458.7 million (INR 30.3 billion) year on year in the first half to September 30. Net profit for the period slumped 44 percent to $4 million, the Indian polished diamond and jewelry manufacturer said in a statement November 10.

Diamond sales advanced 19 percent to $414.1 million, while sales of studded jewelry increased 2 percent to $61.1 million. Profit on diamonds before tax and finance costs increased 13 percent to $16 million, while profit on studded jewelry fell 34 percent to $2.1 million.

Alibaba Settles $5bn in First 90 Minutes of ‘Singles Day’

Five billion dollars were settled through third-party online payment platform Alipay in the first hour and a half of the ‘Singles Day,’ an annual Chinese festival for bachelors, Alibaba Group said in a statement. More than $14 billion in sales was reported by the company.

Sales to the tune of $3.9 billion were recorded in the first hour from midnight on November 11, of which $2.9 billion, or 74 percent, was through transactions made on mobile phones.

Singles Day takes place on November 11 each year because the date in numbers has four “ones” in a row and has become a key day in the retail calendar.

MINING 	  

Letšeng Sales +7%

Gem Diamonds rough diamond sales advanced 7 percent to $65.6 million year on year in the third quarter to September. It sold 25,460 carats from its Letšeng mine in Lesotho, an increase of 8 percent, and average prices fell 1 percent to $2,578 per carat. Recovery increased 4 percent to 29,460 carats.

Recovery guidance for the full year was adjusted upwards to 105,000 to 108,000 carats, with sales expected at between 103,000 and 105,000.

It also recovered 31,922 carats from Ghaghoo, a Botswanan mine that opened in September 2014.

Lucara’s 3Q Revenue Flat, Profit +6%

Lucara Diamond Corp., which operates the Karowe mine in Botswana, reported that revenue was flat at $90.9 million year on year in the third quarter to September 30. Profit for the period increased 6% to $44.2 million.

Production at Lucara’s Karowe mine slipped 5% to 100,651 carats, but mining performed well, the company said, having recovered 160 special stones of more than 10.8 carats. The company’s special stone production had an average size of 33.49 carats, a 34% increase on the 2014 full year.

The company held one exceptional stone tender and a regular tender during the quarter, which between them generated proceeds of $89.2 million from the sale of 76,156 carats, or $1,171 per carat.

Murowa Working to Boost Production

Zimbabwe’s Murowa mine, formerly controlled by Rio Tinto, is set for a return to diamond production, after earlier fears that it was shutting down following the key investor’s exit.

The mine is working on boosting production, Zimbabwean newspaper The Chronicle cited Lovemore Chihota, chairman of operator Murowa Diamonds, as saying. Rio Tinto pulled out of the project in June, selling its 77.8 percent stake to RioZim.

GENERAL 	  

GIA to Hold Synthetics Seminars in Israel

The Gemological Institute of America (GIA) will organize two seminars on methods of treating diamonds and recognizing synthetics at the Israel Diamond Exchange in mid-November.

GIA researchers James Shigley and Brenda Harwick will speak at the event, which will be held on November 15 and 16, the Israel Diamond Institute said on its website. Identifying Diamond Treatments will focus on laser drilling, fracture filling, high-pressure, high-temperature (HPHT) treatment, irradiation and other treatment processes.

Identifying Synthetic Diamonds will give information on HPHT and diamond growth using chemical vapor deposition and ways of distinguishing them from natural stones.

ECONWATCH 	  

Diamond Industry Stock Report

Chinese retailer stocks were down after both Chow Tai Fook (-9%) and Luk Fook (-7%) issued profit warnings. U.S. retailers were generally stable except Macy’s (-20%). Miners’ shares were largely flat this past week, but there were sizable falls for the UK’s Petra Diamonds (-29%), Anglo American (-19%) and Canada’s Dominion Diamond Corporation (-14%). True North was the strongest mining stock (+13%). In India, there were sharp declines for India’s C. Mahendra (-18%), Classic Diamond (-11%) and Goldiam International (-9.5%).

View the detailed industry stock report.
Nov. 12 (10:00 GMT) Nov. 5 (07:53 GMT) Chng.
$1 = Euro 0.93 0.92 0.010
$1 = Rupee 66.01 65.75 0.3
$1 = Israel Shekel 3.90 3.90 0.00
$1 = Rand 14.21 13.95 0.26
$1 = Canadian Dollar 1.33 1.32 0.01

Precious Metals
Gold $1,087.45 $1,108.85 -$21.40
Platinum $979.50 $979.50 $0.00
Silver $14.42 $15.02 -$0.60

Stock Indexes Chng.
BSE 25,866.95 26,475.41 -608.46 -2.3%
Dow Jones 17,702.22 17,867.58 -165.36 -0.9%
FTSE 6,255.82 6,412.88 -157.06 -2.4%
Hang Seng 22,888.92 23,026.49 -137.57 -0.6%
S&P 500 2,075.00 2,102.31 -27.31 -1.3%
Yahoo! Jewelry 1,050.48 1,058.30 -7.82 -0.7%

Najväčšie diamantové lúpeže:

www.aktuality.sk/clanok/308189/kradez-rozpravkoveho-prstena-v-bratislave-je-len-kvapka-v-mori-toto-su-najvacsie-diamantove-lupeze/

http://www.novinky.cz/koktejl/386783-v-botswane-nasli-druhy-nejvetsi-diamant-v-historii.html

Pekný kúsok.😲

Rapaport Weekly Market Comment November 19, 2015

Polished trading improves slightly, supported by shortages and U.S. holiday demand. Retailers discounting for Black Friday with Amazon offering 70% on fashion jewelry and Macy’s 30% on engagement rings. U.S. Oct. price index for jewelry -1%. India’s Diwali jewelry sales moderate. HK jewelers under pressure as Luk Fook warns 1H profit -40%. Gold slump to 5-year low ($1,065/oz.) may boost Chinese New Year sales of low-margin gold jewelry. Rough market very quiet as cutters refuse to manufacture at high prices. India’s Oct. polished exports -17%. Civil Society boycotts Kimberley Process over UAE chairmanship. Lucara finds historic 1,111ct. and 843ct. diamonds at Botswana Karowe mine.

RapNet Data: November 19

Diamonds 1,142,147
Value $8,009,571,477
Carats 1,258,453
Average Discount -28.88%

www.rapnet.com

The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

Get Current Price List | Subscribe to Rapaport | Join RapNet

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November 17-25 Tue-Wed

Rapaport Melee Auction

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December 8-16 Tue-Wed

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December 9-16 Wed-Wed

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QUOTE OF THE WEEK
The significance of the recovery of a gem-quality stone larger than 1,000 carats, the largest for more than a century, cannot be overstated.

Lucara president and chief executive officer William Lamb on the recovery of a 1,111-carat diamond from the Karowe mine in Botswana

MARKETS 	  

United States: Sentiment improving with some last-minute holiday demand ahead of Black Friday / Thanksgiving weekend. Buyers more aggressive...

Belgium: Antwerp trading quiet. Concern that Paris attacks will reduce European consumer and tourist spending this Christmas...

Hong Kong: Some improvement with buyers looking for bargains in Far East while India is closed.Savvy diamond dealers capitalize on Single’s Day ...

India: Activity slow with manufacturers still on Diwali break. Dealers slowly returning to work and regular activity expected to resume next week...

Israel: Slight improvement in the past few weeks with dealers focused on filling U.S. holiday orders. Dealers lack confidence as turnover below...

Click here to continue reading

INDUSTRY 	  

Civil Society Coalition to Boycott Kimberley Process

The Kimberley Process Civil Society Coalition (CSC) will boycott next year’s Kimberley Process (KP) in response to the United Arab Emirates’ (UAE) chairmanship of the organization. The group said it lacked a sincere partner in the effort to work with the UAE to address governance issues ahead of the country taking the helm in 2016.

The CSC said concern has been raised about the “undervaluation” of diamonds entering the UAE, claiming that exports of diamonds from Dubai in 2014 were on average 40% higher than their original import values. Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC), said the CSC’s remarks were “baseless.”

India’s Polished Exports -17%

India’s polished diamond exports fell 17% to $1.8 billion year on year in October, according to data from the Gem & Jewellery Export Promotion Council. The average price of the exports plunged 29% to $499.44 per carat.

Polished imports plummeted 53% to $282.2 million during the month. As a result, net polished exports, or exports less imports, declined 4% to $1.6 billion.

India’s rough imports increased 15% to $1.1 billion in October and rough exports slumped 38% to $66.7 million. Net rough imports increased 21% to $1 billion.

The net diamond account, representing the excess of total exports of polished and rough over total imports, fell 30% to $551.1 million.

IDE President Won’t Seek Re-election

Israel Diamond Exchange (IDE) president Shmuel Schnitzer will not run for re-election in mid-December, a spokesperson for the IDE confirmed with Rapaport News.

The election is being contested between Yoram Dvash, owner of Yoram Dvash Diamonds, and Arnon Yuval, partner at S. Yuval & Co. Both currently serve on the IDE’s executive committee.

Schnitzer, who is chief executive officer and chairman of S. Schnitzer Diamonds, served as IDE president from October 2013 following a previous term from 1998 to 2004. He was president of the World Federation of Diamond Bourses between 2002 until 2006.

Rajesh Exports’ Revenue, Profit Surge

Indian jewelry manufacturer and marketer Rajesh Exports reported sales rose about four-fold in the second quarter, pushing up net profit by 75%.

Revenue surged to $6.7 billion (INR 443.2 billion) in the three-month period that ended September 30, the company said in a statement. Net profit climbed to $43.3 million as expenses advanced to $6.6 billion.

Results included revenue and profit figures for August and September from metal refining group Valcambi, which Rajesh acquired for $400 million at the end of July.

Scio’s Revenue Doubles, Loss Widens

Lab-grown diamond producer Scio Diamond Technology Corporation reported sales more than doubled in the second quarter following an increase in the production of single-crystal colorless stones.

Revenue surged to $236,292 in the three months that ended September 30, the Greenville, South Carolina-based company said in a statement. Cost of goods sold jumped 13% to $461,279 from a year ago and the net loss rose 8% over the same period to $809,588.

RETAIL & WHOLESALE 	  

U.S. Jewelry Prices Fall 1% in October

The U.S. consumer price index (CPI) for jewelry fell 1.1% in October from the previous month, according to the U.S. Bureau of Labor Statistics. The CPI’s reading for the month was down 2.2% from a year ago.

October’s CPI for watches at 124.30 points was down 1.4% over the previous month; it was flat relative to a year earlier.

Meanwhile, U.S. specialty jewelry-store sales in September barely changed year on year, dipping 0.6% to $2 billion, according to the U.S. Census Bureau. On an adjusted basis taking into account seasonal fluctuations, sales dropped 0.5% to $2.5 billion. The sales data lags by a month.

Swiss Watch Exports Slip 12%

Swiss watch exports fell 12.3% year on year to $2 billion (CHF 2 billion) in October as exports to Hong Kong, China and the U.S. fell. Wristwatch exports decreased by 13% to $1.9 billion, while other timepiece exports declined 4.4% to $119 million, according to figures from the Federation of the Swiss Watch Industry.

The poor result stems primarily from an acute contraction of the main markets of Asia and the United States, the Federation said.

The largest drop in exports occurred in watches made from gold and steel, which slid 22% to $260 million. Exports to key consumer markets dropped substantially, with sales to Hong Kong down 39% to $258 million, exports to the U.S. down 12% to $232 million and sales to China declining 5% to $120 million.

Macy’s Cuts Prices for Black Friday

U.S. retailer Macy’s will offer shoppers a 30% discount on diamond engagement rings as part of its Black Friday specials, according to a company announcement.

The sale will include purchases made in-store and online beginning in the evening of Thanksgiving, November 26. Select items in the retailer’s fashion jewelry lines will be priced at “buy one, get one free.”

Amazon to Offer 70% off Diamond Jewelry

Amazon.com will offer discounts of as much as 70% on selected diamond jewelry and up to 50% off selected luxury watches for women as part of its Black Friday deals.

The discount bonanza will start November 20, a week ahead of Black Friday, with new deals being added on a dedicated site as often as every five minutes for eight consecutive days. It will also offer 10 ‘Deals of the Day’ starting at midnight on Thanksgiving, November 26, and up to another 10 more promotions on Black Friday, November 27.

Last year, holiday-season sales from Amazon’s e-commerce app doubled in the U.S., and Black Friday had the fastest growth in mobile shopping, according to the company.

Blackstone Acquires Diamonds Direct

Private equity firm Blackstone Group has acquired jewelry retailer Diamonds Direct for an undisclosed sum. Diamonds Direct, founded in 1995 in Charlotte, North Carolina, has grown to become a multi-channel retailer, with several stores across the U.S. as well as an e-commerce platform.

The takeover, which closed in early November, was completed through an affiliate company, Blackstone Tactical Opportunities, the U.S.-based asset manager said in a statement November 16. The same affiliate acquired equity in Canadian miner Stornoway Diamond Corporation and a minority interest in the Renard diamond stream in Québec in April.

Luk Fook Issues Profit Warning

Luk Fook Holdings’ profit will probably plummet about 40% as the Hong Kong-based retailer saw a decline in sales amid rising costs in the first half of its calendar year.

Revenue from gem-set jewelry products will fall, cutting gross margin, in the six months to September 30, the company said in its guidance before the release of full results on November 30.

MINING 	  

Lucara Finds Second-Largest Diamond in History

Lucara Diamond Corp. has recovered a 1,111-carat stone from its Karowe mine in Botswana, claiming it is the second-largest gem-quality diamond ever recovered and the largest since the 3,106-carat Cullinan diamond in 1905.

The type-II stone, measuring 65mm x 56mm x 40mm, is the largest diamond ever retrieved through a modern processing facility and the largest recovered in Botswana, according to the Canadian miner.

“The significance of the recovery of a gem-quality stone larger than 1,000 carats, the largest for more than a century, cannot be overstated,” president and chief executive officer William Lamb said. Lucara also recovered two diamonds weighing 813 and 374 carats from Karowe, it said.

The announcement came after the group reported sales of $29.7 million from its recent exceptional stone tender, with 13 diamonds from Karowe selling for an average of $20,625 per carat.

ALROSA Makes Double Hire

ALROSA has hired Vladislav Zhdanov as vice president from machine maker Zhejiang Noblelift Equipment JSC, handing him responsibility for the Russian miner’s financial security, internal audit and risk management. The appointment follows the Russian government’s recent approval of a corporate governance code that mandates more effective risk management and calls for the creation of relevant new business units.

Meanwhile, the miner appointed Oleg Petrov as director of its United Selling Organisation (USO), the Moscow-based unit that sorts, prepares, valuates and sells ALROSAs diamond production. Petrov joined the Russian mining group in September as an adviser to president Andrey Zharkov. He was previously sales and marketing director at potash fertilizer company PJSC Uralkali, ALROSA said.

De Beers Appoints Strategy Director

De Beers has appointed Bruce Cleaver as group director for strategy and business development, responsible for industry trend analysis. He will retain his place on the board as a non-executive director, according to parent company Anglo American.

Chief financial officer Gareth Mostyn has taken on Cleaver’s previous role as executive head of strategy and corporate affairs. Both appointments are effective January 1, 2016. A new CFO will be chosen in due course, Anglo said.

GENERAL 	  

De Beers To Host Botswana Conference

De Beers will co-host a conference in Gaborone later this month in conjunction with Botswana’s Ministry for Minerals, Energy and Water Resources, dealing with the impact of the diamond industry on the country’s development.

The two-day event on November 23 and 24, entitled ‘Connecting Resources and Society,’ will address how the responsible management of resources can ensure diamond exploration benefits future generations. All sessions will be available to view online.

India Plans Advertising Push

India’s Gem & Jewellery Export Promotion Council (GJEPC) is planning to team up with the world’s leading miners to drum up interest in the country’s diamonds through promotional campaigns and celebrity endorsements, according to The Economic Times.

The council is considering joining hands with the likes of Rio Tinto, ALROSA and De Beers for marketing diamonds into strategic hubs such as China, Latin America and the Middle East, the daily newspaper reported.

The trade body will hire country-specific advertizing agencies to initiate campaigns based on local purchasing trends, the newspaper cited GJEPC chairman Praveen Shankar Pandya as saying.

ECONWATCH 	  

Diamond Industry Stock Report

Industry-related stocks were broadly down over the past week. U.S. retailers fell, led by Birks Group (-16%) and Nordstrom (-10%). Chinese jewelry retailer shares followed declines in the local Hang Seng index, led by Luk Fook (-7.6%) and Chow Tai Fook (-3.4%). Miners’ shares were largely down, including declines in Rockwell Diamonds (-15%) and Firestone Diamonds (-15%).

View the detailed industry stock report.
Nov. 19 (10:30 GMT) Nov. 12 (10:00 GMT) Chng.
Currencies
$1 = Euro 0.94 0.93 0.003
$1 = Rupee 66.16 66.01 0.1
$1 = Israel Shekel 3.89 3.90 -0.01
$1 = Rand 14.13 14.21 -0.08
$1 = Canadian Dollar 1.33 1.33 0.00

Precious Metals Chng.
Gold $1,070.72 $1,087.45 -$16.73 -1.5%
Platinum $849.42 $979.50 -$130.08 -13.3%
Silver $14.18 $14.42 -$0.24 -1.7%

Stock Indexes Chng.
BSE 25,792.40 25,866.95 -74.55 -0.3%
Dow Jones 17,737.16 17,702.22 34.94 0.2%
FTSE 6,255.82 6,255.82 0.00 0.0%
Hang Seng 22,888.92 22,888.92 0.00 0.0%
S&P 500 2,075.00 2,075.00 0.00 0.0%
Yahoo! Jewelry 1,050.48 1,050.48 0.00 0.0%

Rapaport Weekly Market Comment November 26, 2015

Rapaport calls for resignation of De Beers CEO and 30-50% rough price cut to inject liquidity and profits into diamond trade. De Beers stops buying and paying Botswana for rough, 2H15 De Beers rough sales expected to plummet at least 60%, possibly 70% Y/Y. (See Rough Bubble Bust article.) U.S. retail okay as holiday season starts. Dealers hope for last-minute orders but concerned as jewelers inventories are high. ALROSA 3Q sales -4% to $619M, loss -47% to $231M, inventory ~20M cts. worth ~$1B ($50/ct.). Signet 3Q sales +3% to $1.2B, profit of $15M vs. loss of $1.3M. Tiffany 3Q sales -2% to $938M, profit +137% to $91M. Chow Tai Fook 1H sales -4% to $3.6B, profit -43% to $201M.

RapNet Data: November 25

Diamonds 1,142,169
Value $8,071,704,603
Carats 1,267,908
Average Discount -28.60%

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The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

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QUOTE OF THE WEEK
Without a viable, profitable and sustainable diamond trade distributing their diamonds, De Beers diamond mines are worthless.

Martin Rapaport, chairman of the Rapaport Group, on De Beers refusal to lower rough diamond prices

MARKETS 	  

United States: New York trading quiet as many businesses close early for long Thanksgiving weekend. Demand weaker than usual before holiday...

Belgium: Sentiment much better than few weeks ago with holiday demand and shortages supporting the market. Very few fresh goods on the market...

Hong Kong: Polished trading stable but cautious with some early Chinese New Year demand. Good demand for dossiers...

India: Trading slowly returning to normal after Diwali with manufacturers expected to return next week. SI-I2 demand strong for U.S. market...

Israel: Gradual improvement continues with dealers focused on filling U.S. holiday demand. Some orders difficult to fill due to shortages...

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INSIGHTS 	  

How Botswana Will Find Independence

Fifty years on from independence, Botswana still finds itself in desperate need of improvements in its economic diversity. Its unsustainable reliance on diamonds is the reason why...

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INDUSTRY 	  

Rapaport Calls for Resignation of De Beers CEO

In an article published this week (“Rough Bubble Bust”), Martin Rapaport details how and why rough diamond prices have been manipulated to artificially high unsustainable levels and the negative impact this is having on the profitability, liquidity and viability of the diamond trade. The fact that rough prices are significantly higher than resultant polished prices is reducing De Beers sales and profits. De Beers suspension of purchases and payments for Botswana diamonds is also having a negative impact on the country.

“The rough diamond distribution system is collapsing as De Beers and other mining companies attempt to force unsustainable artificially high rough diamond prices on the diamond trade. Rough prices are higher than polished prices, which have come down to realistic levels due to the downturn in the global economy. The mining company’s refusal to lower rough prices is destroying the diamond trade, creating severe financial losses, illiquidity, supply shortages, and the loss of tens of thousands of jobs. De Beers must immediately inject liquidity into the diamond trade by reducing rough diamond prices 30-50%. There is no justification for rough prices higher than polished diamond prices. Without a viable, profitable and sustainable diamond trade distributing their diamonds, De Beers diamond mines are worthless,” said Martin Rapaport, Chairman of the Rapaport Group.

De Beers Shareholders to Meet on Diamond Prices

De Beers shareholders were scheduled to meet November 26 to discuss diamond prices, Botswana Minerals, Energy and Water Resources Minister Kitso Mokaila said.

Speaking November 23 at a conference in Gaborone, the minister said “diamond prices have been coming down and something more sustainable needs to be done. The shareholders need to get their heads together.” Anglo American PLC owns 85 percent of De Beers and the government of Botswana owns the rest.

The conference, exploring the role of Botswana’s diamond industry in the socio-economic development of the country since independence, was hosted jointly by De Beers and the ministry November 23 and 24.

Diamonds in Hacking Case Still Unreturned

Only 175 of the 1,042 diamonds whose Gemological Institute of America (GIA) reports were invalidated last month following a hacking incident have been returned for examination, the organization said.

“It is imperative that all of the diamonds and their reports be returned to GIA for examination to remove the fraudulently altered reports from the market,” the GIA said in a statement November 25.

The GIA nullified the certificates after the gems’ color and clarity reports were changed by hackers. The group requested on October 23 that anyone in possession of any of the stones or reports return them immediately for a free examination.

DPA Hires Creative Agency

The Diamond Producers Association (DPA) has hired creative agency Mother New York to help kick-start the appeal of diamonds to young people.

The move comes after the consortium of miners, including ALROSA, De Beers and Rio Tinto, appointed Sally Morrison as managing director of marketing in October. She has responsibility for all of the organizations marketing activities, including the appointment of an agency partner.

Israeli Diamond Industry Offers 50% Cyber-Monday Cuts

The Israeli Diamond Industry is offering discounts of up to 50% for Cyber Monday, the annual post-Thanksgiving online sales bonanza.

Jewels are being sold from a dedicated promotions website, which will run until December 4, the trade group said in a statement November 23. List prices of items of offer range from $700 to $450,000 and reductions start at 6%.

Categories of jewels in the promotion include polished white and natural fancy color stones, engagement rings, pendants, earrings and bracelets, according to the statement.

Silver Supply Will Drop in 2015: Reuters

Silver supply will decrease 3 percent this year as production is predicted to grow at its slowest pace in 13 years following weaker demand from the jewelry and electronics industries, and China, according to a forecast from Thomson Reuters. Bullion coin sales jumped to a new record.

Total supply is expected to slide to 1,014.4 million ounces (Moz), Erica Rannestad, senior analyst in the GFMS team at Thomson Reuters, said at an event hosted by the Silver Institute. Output is projected to record its narrowest advance since 2002, up 0.3 percent to 867.2 Moz.

Jewelry fabrication is expected to fall 2.5 percent from a year earlier as the industry in China plummeted 25 percent.

Namibian Factories Decimated in Downturn

Nine of Namibia’s 13 diamond-cutting and polishing factories have shut down over the last few years because of a downturn in the industry across the world, The Namibian cited the country’s minister for mines and energy Obeth Kandjoze as saying.

The four remaining cutting centers now employ 700 workers compared with 2,000 at the peak, Kandjoze told an International Diamond Conference in Windhoek, according to the November 24 report.

WDC Seeks Amnesty’s Help to Resume CAR Trade

World Diamond Council’s president Edward Asscher called on Amnesty International to return to the Kimberley Process (KP) and help resume diamond trading with the Central African Republic. The country has been suspended from the KP since 2013.

Asscher joined more than 300 delegates from 50-plus countries at the five-day KP plenary meeting at Luanda in Angola last week, the industry body said in a statement November 24.His speech followed an Amnesty report on diamond trafficking from the Republic that alleged gem sales still funded violence in country. The report wasdescribed by the NGO’s legal adviser Lucy Graham as “a damning indictment of the Kimberley Process.”

RETAIL & WHOLESALE 	  

Signet Misses Expectations

Signet Jewelers reported that third-quarter earnings were below expectations as sales were driven by lower-margin Kay stores and lower prices at Zales.

Mark Light, Signet’s chief executive officer, noted that earnings were affected by a modest margin impact due to a shift in its sales mix from the higher-value Jared stores to Kay.

The company registered adjusted earnings of 33 cents per share for the three months that ended October 31, compared to 21 cents a year ago. However, that was below its guidance given in August of 36 to 40 cents per share.

Group sales rose 3.3% to $1.22 billion in the third quarter year on year, with same-store sales up 3.3%. Net income rose to $15 million from a loss of $1.3 million a year earlier.

Tiffany���s Revenue -2%

Tiffany & Co said sales declined 2% to $938.2 million in the third quarter that ended October 31, with the strong U.S. dollar hampering reported revenue figures. In the nine months to October, sales decreased 2% to $2.9 billion and profit narrowed 4% to $288 million.

On a constant-currency basis, sales rose 4%. Comparable-store sales increased 1% due to growth in Japan and Asia Pacific but the performance was offset by lower sales in the Americas, the U.S. jewelry retailer said. Profit more than doubled to $91 million and net earnings per diluted share grew at a similar rate to $0.70.

The company has revised its full-year net earnings estimate for 2015 downward and now expects the figure to decrease by 5% to 10% from last year’s $4.20 per diluted share.

Chow Tai Fook’s Profit -43%

Chow Tai Fook reported that sales fell 4% to $3.6 billion (HKD 28.1 billion) in the six months that ended September 30 due to weak consumer sentiment in Hong Kong and Macau and declining numbers of tourists visiting Hong Kong from mainland China. Profit plummeted 43% to $201.4 million, the Hong Kong jewelry retailer said.

Same-store sales in Hong Kong and Macau slumped 18%, while mainland China comparative sales were basically flat. Same-store sales fell 9% overall, according to a statement November 24.

Revenue in Hong Kong, Macau and other markets excluding mainland China fell 7% to $1.5 billion. Jewelery sales in mainland China performed better, edged down 1% to $2 billion, while watch sales in that market slid 12% to $115.5 million.

Luk Fook’s Profit -43%, Revenue Slips

Luk Fook Holdings International Limited reported revenue declined 7.7% to $898.6 million (HKD 5.4 billion) in the six months to September 30 as a result of the Chinese downturn and the weak Hong Kong tourism industry.

Profit for the first half slumped 43% to $59.8 million, according to a company statement November 26. Overall revenue in Hong Kong – which makes up 60% of group-wide sales – fell 6.3% to $542.5 million.

Gem-set jewelry sales fell 16% to $323.3 million, but gold sales improved as a result of a sales rush when prices dropped in July and August.

Early Black Friday Data Not Good Indicator of Actual Sales

Early Black Friday figures claiming to signal how well the holiday period is progressing should be ignored as initial numbers fail to accurately predict the actual sales, according to FiveThirtyEight.com.

First round of news stories on Thursday evening or Friday are driven “almost entirely by anecdote” such as length of queues and isolated interviews, Ben Casselman, the chief economics writer at the data website, said in a note November 25. Updates on Sunday and Monday tend to contradict each other and are disproven by subsequent official statistics.

Birks Group’s 1H Revenue -4%

Birks Group’s sales fell 4% to $134 million year on year in the six months to September 26, mainly because of unfavorable foreign exchange rates, the Canadian jewelry retailer said November 20.

Excluding a $10.2 million adjustment attributable to translating Canadian sales into U.S. dollars, revenue increased 3% to $144.2 million. Comparable store sales grew 3%. Gross profit fell 7% to $51.6 million. The Canadian dollar depreciated 4.9% against the U.S. currency in the period, according to data compiled by Bloomberg.

Sotheby’s to Auction $4.6M Diamond Necklace

Sothebys will auction a platinum and diamond necklace estimated to sell at between $3.6 million and $4.6 million in New York on December 9. The bib-style piece set with 217 carats of diamonds in a ‘sunburst’ motif was created in 1939 by Van Cleef & Arpels for Queen Nazli of Egypt, the auctioneer said.

Other lots include a platinum, Kashmir sapphire and diamond ring valued at $3.5 million to $4.5 million that had been in the possession of three generations of the family of financier Thomas Fortune Ryan, and a platinum and diamond ring estimated at $3.5 million to $4.5 million set with a square emerald-cut, 38.27-carat, D, VVS2, type-IIa diamond from the estate of an Italian countess.

Graff Ring Collection Inspired by Prohibition-Era Parties

Graff Diamonds has introduced a ring design inspired by America’s flamboyance in the 1920s and the excitement of alcohol-laden secret parties of the prohibition era.

Rings in the new collection feature a dome consisting of layers of diamonds in a swirl, with an elevated central stone as the focal point. Women at the time wore “show-stopping” statement rings which in subsequent years were billed ‘cocktail rings’ and have remained fashionable, the U.K.-based jewelry retailer said in a statement.

Among the designs is a ring of “exceptionally rare” pink pavé diamonds surrounding a 4.18-carat brilliant round precious stone. Others incorporate white pavé diamonds featuring a 5.34-carat radiant-cut fancy intense yellow stone, a 4.38-carat emerald-cut diamond or a 4.21-carat pear-shaped stone.

MINING 	  

ALROSA Loss Widens 47%

ALROSA reported revenue decreased 3.5% to $619.4 million (RUB 40.6 billion) in the third quarter that ended September 30. The Russian miner’s loss increased 47% to $231.2 million, driven partly by the depreciation of the ruble against the U.S. dollar. The U.S. dollar strengthened 17% against the ruble between December 31, 2014, and September 30, 2015, the statement said, citing official exchange rates from the Central Bank of the Russian Federation.

The company’s diamond sales decreased 4.5% to $524.7 million, with exports rising 4% to $454 million and domestic sales falling 11% to $64 million. Diamond inventory expanded 48% to $724.7 million.

The company “revised” its sales budget to reflect changes in the diamond market and macroeconomic factors but kept this year’s production plan unchanged at 38 million carats, it said after a supervisory meeting last week.

Dominion Sales -53%

Dominion Diamond Corporation’s revenue slumped 53% to $145 million year on year in the third quarter that ended October 31. In volume terms, sales fell 31% to 795,000 carats and the average price slid 25% to $145 per carat, the Toronto-based miner said.

Sales from the Ekati Diamond Mine in Canada increased 5% to 480,000 carats, but a 41% drop in the average price to $184 per carat resulted in sales dropping 38% to $88.2 million in value terms.

Revenue from the Diavik Diamond Mine, also in Canada, dropped 29% to $56.8 million as the volume of rough sales plummeted 55% to 315,000 carats. However, the average price increased 56% to $180 per carat.

Stellar Diamonds Cuts Loss 25%

Stellar Diamonds, a U.K.-based exploration group focused on West Africa, cut its annual loss by 25% as revenue grew from naught last year and costs were slashed.

Its loss fell to $3.1 million in the year to June 30, according to a November 24 statement from the company, which is listed on London’s Alternative Investment Market. Sales jumped to more than $614,228. Administrative costs plummeted 48% to $1.4 million as corporate and project-level expenses were reduced.

Botswana Diamonds Cuts Loss 64%

Botswana Diamonds trimmed its losses by 64% to $568,511 (GBP 372,502) in the full year to June 30, the Irish miner reported in a statement November 19. The exploration group has not made any sales to date. It mines for diamonds in the Orapa and Gope areas of Botswana primarily through a 50-50 joint venture with Russia’s ALROSA.

While in 2014 its loss was compounded by the downward revaluation of assets to the tune of $939,931, the figure was zero this year. As a result, the operating loss narrowed 68% to $512,122 as administrative expenses for the year fell 23%.

Peregrine Diamonds Announces Rights Issue

Peregrine Diamonds has announced a $7 million rights issue to finance the remaining work on its Chidliak mining project at Nunavut in Canada and exploration in Botswana.

The proceeds will be used to further the remainder of the 2015-2016 Chidliak Diamond Resource Development Program, and fund the 2016 Chidliak work program, according to a company statement.

Funds raised would also go toward extending exploration in Botswana and potentially for meeting working capital requirements, the company added.

GENERAL 	  

IDC Unveils New Website

The International Diamond Council (IDC), a trade body that formulates globally recognized standards for diamond grading and terminology, has launched a new website to aid users’ understanding of the trade.

The site enables downloading the IDC’s rules on describing precious stones in English, German, Russian, Arabic and Chinese, the council said in a statement November 20.

The development comes after the International Organization for Standardization (ISO) published a new consumer-orientated guide to diamond vocabulary in July 2015.

Kim Kardashian Demands Diamond Choker

Celebrity Kim Kardashian has requested a Lorraine Schwartz diamond choker as a ‘push present’ – a post-pregnancy gift – from husband Kanye West.

“Do you guys believe in a push present? I never did, but all of my friends do! We have the funniest e-mail chains discussing it,” she wrote on her official blog, before adding “this pregnancy, I would love a Lorraine Schwartz diamond choker, like the ones Ive worn before to the Art + Film Gala.”

The blog presents other ‘push present’ jewelry gift ideas ranging from $78 to $2,600.

ECONWATCH 	  

Diamond Industry Stock Report

Mining stocks this past week were led by a surge by Lucara Diamond Corp. (+28%) following its discovery of the second largest diamond in history. Dominion Diamond Corporation fell 9% on disappointing third-quarter results. North American retailers Birks Group (+27%) and Tiffany (+9%) and Hong Kong’s Chow Tai Fook (+4%) rose despite reporting mixed or disappointing earnings figures.

View the detailed industry stock report.
Nov. 26 (10:30 GMT) Nov. 19 (10:30 GMT) Chng.
$1 = Euro 0.94 0.94 0.007
$1 = Rupee 66.56 66.16 0.4
$1 = Israel Shekel 3.88 3.89 -0.01
$1 = Rand 14.24 14.13 0.11
$1 = Canadian Dollar 1.33 1.33 0.00

Precious Metals Chng.
Gold $1,071.08 $1,070.72 $0.36 0.0%
Platinum $850.50 $849.42 $1.08 0.1%
Silver $14.22 $14.18 $0.04 0.3%

Stock Indexes Chng.
BSE 25,958.63 25,792.40 166.23 0.6%
Dow Jones 17,813.39 17,737.16 76.23 0.4%
FTSE 6,362.94 6,255.82 107.12 1.7%
Hang Seng 22,488.94 22,888.92 -399.98 -1.7%
S&P 500 2,088.87 2,075.00 13.87 0.7%
Yahoo! Jewelry 1,000.82 1,050.48 -49.66 -4.7%

Rapaport Weekly Market Comment December 03, 2015

Black Friday sales (-10%) signal shifting consumer behavior. Millennials buying more on mobile as comScore reports online Thanksgiving-Cyber Monday sales +24% to $5.3B. Branded bridal strong with U.S. Oct. jewelry sales +2% to $4.7B. Polished prices stable but shortages constraining holiday orders for select goods. Nov. 1ct. RAPI +0.7%. Rough market under pressure ahead of another very small De Beers sight next week. Rough auction demand firming. Lukoil’s 9M Grib diamond sales reach $122M. Christie’s HK sells $97M (80% by lot). Luk Fook 1H revenue -8% to $899M, profit -43% to $60M. De Beers sells final stake in Kimberley mines to Petra, Ekapa for $7.2M.

RapNet Data: December 3

Diamonds 1,139,579
Value $8,055,270,593
Carats 1,263,976
Average Discount -28.66%

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The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

Get Current Price List | Subscribe to Rapaport | Join RapNet

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QUOTE OF THE WEEK
The polished pipeline is a little bit overloaded and it will probably take until about the middle of next year to come back to normal levels.

Jean-Marc Lieberherr, managing director of Rio Tinto’s diamond unit, in an interview with Bloomberg Television.

MARKETS 	 

United States: New York trading is slower than expected before Christmas and there is a sense that jewelers have what they need for the holiday...

Belgium: Sentiment improves slightly with steady U.S. and European holiday orders. Trading still lower than previous years...

Hong Kong: Polished trading okay with steady demand for GIA dossiers and carat sizes. Trading better-than-expected at last week’s...

India: Polished trading improves after Diwali with locals and overseas buyers in the market. Shortages supporting prices, especially for 0.30-0.50ct...

Israel: Sentiment improves slightly with better demand and tight supply of RapSpec A2+ (3X, none) diamonds. Dealers looking for goods in anticipation of new orders...

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INDUSTRY 	  

GJEPC and BDB to Hold Detecting Synthetics Seminar

India’s Gem & Jewellery Export Promotion Council (GJEPC) and the Bharat Diamond Bourse (BDB) are teaming to share how to use new technology to detect synthetics.

The Diamond Detection Expo and Symposium, December 15 and 16 in Mumbai, will display the latest equipment and give attendees access to service providers active in the synthetics detection business. Exhibitors will include GIA India, the International Gemological Institute and the International Institute of Diamond Grading & Research, part of De Beers.

The symposium comes a few months after the BDB banned trading in synthetic diamonds at the exchange.

Fake KP Certificate Found in Shipment from Sierra Leone

The Kimberley Process (KP) urged its members to stay vigilant after the Antwerp World Diamond Centre (AWDC) alerted the organization about a fake KP certificate in a rough diamond shipment from Sierra Leone.

The fake certificate “was confirmed by the Sierra Leone authorities,” the AWDC said in a statement December 1. The number on the certificate was from a number range used in 2014, the parcel number was also incorrect and dotted lines on the document did not correspond with the original, the statement said.

WW2 ‘Victory’ Under Hammer at Christie’s New York

Christie’s will auction a diamond that commemorated the Allied victory over the Germans in World War II as part of its Magnificent Jewels tender in New York. Estimates of jewelry up for auction range from $2,000 to more than $4 million. The sale will be held December 10, the company said in a statement November 30.

The central attraction of the auction is the diamond named ‘Victory,’ a 31.34-carat and D-color gem with a rectangular cut, which Christie’s estimates suggest will fetch $4 million to $5 million. Last offered at Christie’s in 1984, this precious stone is part of the collection of Florence J. Gould, the daughter-in-law of the 19th century railroad magnate Jay Gould.

Also under the hammer is the $2 million to $3 million ‘Petrie’ ring with a 24.34-carat D-color gem designed by Harry Winston from the estate of socialite Carroll Petrie.

Sotheby’s Jewelry Sales Expected to Dip

Sotheby’s worldwide jewelry auction sales in 2015 will likely be below its record reached last year, according to the auctioneer’s estimates.

While auction revenues since the start of this year have hit $506.5 million, the company estimated that the final figure for the whole year is likely to fall below the $602.5 million figure seen in 2014. It cautioned, however, that the numbers are “not calculated with the same exact information” as previous periods.

Sotheby’s upper estimate for its three final jewelry auctions of the year is $87.4 million cumulative. If it were to reach this figure, annual sales would stand at $593.9 million.

RETAIL & WHOLESALE 	  

Signet’s Jared to Add Pandora in 200 Stores

Signet Jewelers’ Jared unit will upgrade more than 200 of its stores to include new Pandora boutiques.

The world’s largest retailer of diamond jewelry, Signet will start installing the enhanced boutiques from next year, according to a Signet statement December 2. Jared had 268 stores as of October 31, according to figures released with its third-quarter results November 24.

Pandora closed 116 unbranded stores -- mainly in independent jewelers -- during the third quarter, mostly in the U.S. The overall number of points of sale in the Americas was cut by 212, or 6 percent, to 3,124, compared with the third quarter last year.

U.S. Jewelry & Watch Sales +2%

U.S. jewelry and watch sales from all retail outlets increased 2% year on year to an estimated $5.29 billion in October, according to provisional government figures. The sector’s total for September was revised, with new figures showing sales improved by 2% to $5.26 billion that month, down from an earlier estimated increase of 4.8%.

Jewelry sales in October increased 2% year on year to $4.67 billion, according to Rapaport News estimates, the same growth rate as September. Watch sales rose 1.6% to $615 million year on year. Both categories have now enjoyed six successive months of growth after four months of decline between January and April.

Thanksgiving Sales Figures Mixed

Sales for the extended Thanksgiving period were mixed, with most analysts tracking the data indicating increases in online sales and declines in spending at bricks-and-mortar stores.

Retail analytics group ShopperTrak said in-store sales on Thanksgiving and Black Friday fell to $12.1 billion. By contrast, online sales on Friday were expected to increase 14% year on year to $2.72 billion, according to Adobe Systems Incorporated.

Cyber Monday sales from desktop computers were up 12 percent to $2.3 billion according to comScore. However, the National Retail Federation forecast that the number of people in the U.S. buying on the key internet sales day would drop 4.6 percent to 121 million.

Cartier Holiday Ad Gets 1.7M Views in a Week

Cartier’s holiday-season commercial for 2015 has been viewed more than 1.7 million times on YouTube, putting it well ahead of major competitors online promotional videos.

The 90-second clip, featuring the classic Diamonds Are a Girl’s Best Friend re-arranged by British artist Jarvis Cocker, had been seen 1,735,074 times by December 1, a week after it was posted on the luxury group’s official YouTube page. It stars U.K. model and musician Karen Elson, who saunters and dances through Paris wearing items from Cartier’s jewelry collection.

Forevermark’s Its a Long Journey to Become The One had been viewed 41,102 times in a month and Tiffany & Co’s commercial got 35,533 clicks after three weeks of release.

LVMH Buys Stake in Italy’s Repossi

French luxury retailer LVMH Moët Hennessy Louis Vuitton has acquired a minority stake in family-run Italian jeweler Repossi, for an undisclosed sum.

The partnership will enable Repossi to develop its distribution network while benefitting from LVMH’s managerial know-how, the French group said in a statement November 30.

Repossi, founded in Turin in 1920, is known for its “iconic” Berber collection and multi-piercing earcuff. The acquisition comes four years after LVMH bought Italian jewelry group Bulgari for about $6 billion in 2011.

Diamond Size Matters to Hong Kong Women

Women vastly overestimate the weight of a diamond embedded in an engagement ring that their husbands-to-be will buy them, a recent poll carried out between November and December 2015 in Hong Kong found.

While 59 percent of 600 women expected their natural-diamond ring to weigh one carat or more and 13 percent anticipated at least two carats, most men said they would only buy a diamond below one carat, according to the 2015 Hong Kong Diamond Consumption Research report.

The survey, published by the Diamond Federation of Hong Kong, revealed 15 percent of 400 men would pick a stone weighing 0.3 to 0.5 carats. While 32 percent of men said they would buy a 1 or 2-carat diamond, only 2.3 percent were prepared to splash out on a 2 to 3-carat gem and 4 percent were ready to buy a diamond weighing 3 carats or more. In contrast, 6.6 percent of women expected a 2 to 3-carat diamond and 6 percent presumed they would get a gem that’s 3 carats or bigger.

Diamond Christmas Crackers Priced at More Than $370,000

Christmas revelers will be able to celebrate the holiday this year with a new kind of Christmas cracker – containing diamonds and costing as much as $371,315 (GBP 247,000).

Six white diamonds selected by U.K. jeweler Tresor Paris, each with a different cut, are being offered inside “hand-crafted” crackers – cardboard tubes wrapped with decorated paper that pop when pulled from either end. A common feature of the Christmas dinner table in many English-speaking countries, they usually contain a cheap gift or joke on a note inside. Sold by luxury product seller VeryFirstTo, they cost $1.5 million for the entire set of six, which include a cracker with a pear-shaped, 3-carat, D-VVS2, type-IIa diamond costing $371,315.

Richemont Hires Adviser on Celebrities, Product Placement

Richemont has created a director-level position to advise on the company’s marketing efforts, such as celebrity procurement and product placement in film, television and red-carpet events.

The luxury group hired Mike Tschida to work on a portfolio of ‘maisons,’ or boutiques, including Cartier, Van Cleef & Arpels, Piaget, Montblanc, Alfred Dunhill and Chloé. He will split his time between New York, Los Angeles, Geneva, and Paris, Richemont said in a statement December 1.

Tschida was previously president of Tschida Brand Entertainment, an entertainment marketing firm based in Los Angeles which handled celebrity procurement, sponsorship, licensing and brand building.

MINING 	  

ALROSA Mulls Production Cut

ALROSA may reduce production in 2016 as its rough diamond inventory is at a critical level in a weak market.

“Currently, our inventory stands in excess of 20 million carats and increasing inventory further would not be feasible for the company, or it would be difficult economically,” Ilya Ryashchin, ALROSA’s first vice president in charge of finance and economy, said in a conference call November 25. “In case 2016 will not see consumption levels back to normal, we would probably reconsider production volumes.”

ALROSA maintained its production in 2015 and is on track to recover 38 million carats even as it has seen sales slump this year.

Rio Tinto Sees mid-2016 Rough Price Drop

Rio Tinto expects rough diamond prices to decline by the middle of next year, Jean-Marc Lieberherr, managing director of the company’s diamond unit, told Bloomberg Television.

“There is a need for the rough prices to adjust to the economic value of the polished price and that trend is in motion at the moment,” Lieberherr said in an interview broadcast Wednesday. There’s a disconnect between prices for rough diamonds and polished ones, he said. The executive said a “logjam” of diamonds held by the industry’s midstream -- traders, cutters and polishers -- will clear by the middle of next year as rough prices decline.

Lukoil 9-Month Diamond Sales Top $120M

Lukoil, Russia’s largest oil producer, said diamond sales totaled $122 million in the first nine months of 2015, its first full year of operating the Grib mine. Third quarter sales amounted to $41 million, according to the company’s earnings report published on November 30.

Sales in the comparable third quarter of 2014 were “relatively insignificant” since they were only launched in September 2014, Lukoil said. The Grib mine is in northwestern Russia, near its border with Finland.

The majority of Lukoil’s diamond production is sold via its Antwerp-based Grib Diamonds subsidiary. Other goods are sold independently in Russia in line with local legislation. Sources close to Grib told Rapaport News that the company is on track to sell 2 million carats in 2015, in line with its plan for the year.

De Beers Sells Last Kimberley Mine

U.K. miner Petra Diamonds and South Africa’s Ekapa Mining have bought the Kimberley Mines from De Beers for $7.1 million (ZAR 102 million), acquiring assets in an area famously known as the heart of the African nation’s early diamond rush of the 1860s.

Ekapa Minerals, a special acquisition vehicle in which Petra owns a 49.9% stake and Ekapa Mining the rest, has purchased a “number” of the so-called tailings dumps located at Kimberley in the Northern Cape Province of South Africa from De Beers Consolidated Mines Proprietary Ltd, Petra said in a statement December 1.

The mines are expected to generate about 700,000 carats per annum in the first three years, which translates into revenue of about $65 million in 12 months, with calculations based on an approximate price of $95 per carat.

De Beers sold the Kimberley Underground Mines to Petra for $10.9 million in 2007. The latest sale marks the mining giant’s exit from Kimberley.

Petra Finds 23-Carat Pink Diamond

Petra Diamonds has recovered a 23.16-carat pink diamond of “exceptional color and clarity” from the Williamson mine in Tanzania.

The gem is the most significant recovery by Petra from Williamson to date and an example of the high-quality pink diamonds for which the mine is known, the Jersey-based miner said in a statement November 27.

The stone will now be offered for sale by appointment in Antwerp as part of Petra’s December tender process, the company added.

Stellar Applies for Tongo License

Stellar Diamonds has applied for license to carry out large-scale mining at the Tongo project in Sierra Leone, the West Africa-focused diamond exploration group said.

“The submission of the Tongo mining license application and ESHIA marks a key milestone in the development of the project as we make the transition from exploration to mining,” chief executive Karl Smithson said in a statement November 27.

This is also the first large-scale mining license application since the onset of the Ebola crisis in the country, Smithson said.

GENERAL 	  

Diamonds Created at Room Temperature

Researchers at North Carolina State University have discovered a method of producing diamonds at room temperature and ambient atmospheric air pressure, identifying a third and previously unknown form of carbon.

Known as Q-carbon, the new ‘phase’ of carbon is ferromagnetic, harder than diamond and glows in the dark. It can be used to create a “variety of single-crystal diamond objects,” the university said in a statement November 30.

Pope Confronts Illegal Diamond Trade

Pope Francis has warned Africa’s illegal trade in diamonds and other precious resources abets criminal activities and terrorism while undermining political stability.

“Human selfishness” and the abuse of the poor and excluded risked tearing Africa into pieces, the head of the Catholic church said in Kenya November 26 during his tour of the continent.

“Illegal trade in diamonds and precious stones,” rare metals and other important resources “fuels political instability, organized crime and terrorism,” he told an audience at the office of the United Nations in Nairobi.

ECONWATCH 	  

Diamond Industry Stock Report

Canada’s Lucara Diamond Corp. (+11%) continued to rise following last month’s 1,111-carat diamond find. The UK’s Petra Diamonds (+21%) jumped after it bought De Beers last Kimberley mine jointly with Ekapa Mining. Another mining group, Rockwell Diamonds, slipped (-23.5%). U.S. and Far-East retail stocks were generally steady, except Birks Group (-22%). Indian stocks were led by Goldiam Intl. (+15%) and Lypsa Gems (+10%).

View the detailed industry stock report.
Dec. 03 (10:30 GMT) Nov. 26 (10:30 GMT) Chng.
$1 = Euro 0.95 0.94 0.005
$1 = Rupee 66.69 66.56 0.1
$1 = Israel Shekel 3.88 3.88 0.00
$1 = Rand 14.34 14.24 0.10
$1 = Canadian Dollar 1.33 1.33 0.00

Precious Metals Chng.
Gold $1,050.70 $1,071.08 -$20.38 -1.9%
Platinum $830.50 $850.50 -$20.00 -2.4%
Silver $13.94 $14.22 -$0.28 -2.0%

Stock Indexes Chng.
BSE 25,886.62 25,958.63 -72.01 -0.3%
Dow Jones 17,729.68 17,813.39 -83.71 -0.5%
FTSE 6,431.72 6,362.94 68.78 1.1%
Hang Seng 22,417.01 22,488.94 -71.93 -0.3%
S&P 500 2,079.51 2,088.87 -9.36 -0.4%
Yahoo! Jewelry 989.47 1,000.82 -11.35 -1.1%

Rapaport Weekly Market Comment December 10, 2015

Polished trading improving with holiday demand as shortages support prices for RapSpec A2+ (3X, none) diamonds. 0.30-0.40ct. improving with significant reductions in supply. Rough demand strong at tenders but very weak for De Beers overpriced rough. Dec. sight estimated at about $100M vs. $577M last year. De Beers says rough prices down 15% in 2015 and its 2016 production will fall from 29M to 26/28M cts. Anglo American moving to Charterhouse as De Beers avoids massive cost-saving restructure. Petra Diamonds sells 23.16ct., pink rough for $10M ($433,938/ct.). Sotheby’s NY sells $52M. U.S. Oct. polished imports -4% to $2.2B, polished exports -13% to $1.3B.

RapNet Data: December 10

Diamonds 1,109,793
Value $8,040,338,822
Carats 1,259,029
Average Discount -28.57%

www.rapnet.com

The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.
Get Current Price List | Subscribe to Rapaport | Join RapNet

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QUOTE OF THE WEEK
The crisis is not a demand crisis, it’s a stock crisis.

De Beers CEO Philippe Mellier on the state of the diamond industry at a presentation to analysts this week

MARKETS 	  

United States: Wholesale market sentiment improves as dealers fill last-minute holiday orders. Limited supply supporting prices, particularly for 0.30-1ct., G-J, SI diamonds...

Belgium: Polished trading stable with buyers filling orders rather than stocking inventory. Suppliers focusing on U.S. and European markets, with some Far East demand...

Hong Kong: Polished trading is stable with good demand for dossiers, 0.30-1ct. diamonds. Some Christmas and Chinese New Year demand for RapSpec A2+ (3X, none) 0.30-0.40ct. D-J, VS-SI diamonds, which are in tight supply...

India: Polished market continues to improve after manufacturers and dealers return from the Diwali break. Good local buying activity with U.S. and Israeli dealers....

Israel: Trading continues to improve due to U.S. holiday demand, some Far East orders and limited supply of better quality RapSpec A2+ (3X, none) diamonds...

Click here to continue reading

INSIGHTS 	  

Higher Interest Rates, Lower Jewelry Spending?

What can the diamond industry expect when the Federal Reserve raises interest rates for the first time in seven years? Or, more pointedly, will a rate hike put a dent in discretionary spending?

Click here to continue reading

INDUSTRY 	  

Polished Diamond Prices Rise in November

Polished diamond prices firmed in November supported by shortages of select categories and seasonal holiday demand. Trading improved with dealers focused on filling U.S. holiday orders but old challenges remain: Manufacturing is unprofitable at current rough price levels and the diamond distribution chain is overstocked, despite some scarcities.

The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rose 0.7% in November, its first increase in six months. RAPI for 0.30-carat diamonds advanced 3.3% and RAPI for 0.50-carat diamonds grew 1.1%. RAPI for 3-carat diamonds fell 0.6%. RAPI for 1-carat diamonds remains down 7.1% since the beginning of the year.

De Beers to Cut 2016 Production

De Beers expects diamond production to fall to between 26 and 28 million carats in 2016 from 29 million carats this year. The change comes amid a restructuring of parent company Anglo American that will see De Beers positioned as one of three core business in the group.

The diamond miner will also make significant cost and headcount reductions, closing mines and focusing exploration efforts on Botswana, South Africa and Canada. De Beers has already slashed its costs of production from $111 per carat in 2014 to $101 per carat in 2016, chief executive officer Philippe Mellier said in a presentation to analysts December 8.

Mellier also argued De Beers has helped open up profit for manufacturers by reducing rough prices by more than polished and was “mindful that the midstream has to generate profit.” The industry is suffering from a “stock crisis” not a crisis in demand, the executive added.

Petra Sells 23-Carat Pink Diamond for $10M

Petra Diamonds Limited has received $10.1 million from the sale of an exceptional 23.16-carat pink diamond, achieving $433,938 per carat for the rough stone. The miner recovered the gem from the Williamson mine in Tanzania in November 2015.

Petra, which is listed on the London Stock Exchange, sold the gem into a partnership and has retained a 20 percent interest future proceeds from polished sales.

The stone was bought by Golden Yellow Diamonds on behalf of Israeli diamond manufacturer M.A. Anavi Diamond Group, which specializes in large and unique colored diamonds.

Baunat Raises $3.5M, Rejects Takeover

Online diamond jewelry company Baunat has raised $3.5 million (EUR 3.3 million) in fresh capital from investors and staff through a private placement. It also rejected a takeover bid by an Asian investor.

The Antwerp-based company said it intends to use the extra funding to accelerate its growth and “become the point of reference on the international online diamond jewelry market.”

Baunat makes 60% of its sales through its online boutique and the rest in its showrooms in Antwerp, Paris, Geneva, Mumbai and Hong Kong. The company plans to open new showrooms in Germany, China, Tokyo and New York by 2018.

Green Light for Shenzhen Exchange

Shenzhen Rough Diamond Exchange (SRDE), a secure diamond storage, sorting and viewing facility in the Chinese city, received final approval to operate Shenzhen Customs House on December 3.

Foreign suppliers will be able to ship diamonds to the new bonded warehouse in the Luohu district of Shenzhen duty-free. Local Chinese companies will then be able to view the goods at the SRDE and purchase them through importation procedures at the Shanghai Diamond Exchange.

Dominion to Hold Rough Viewings at BDB

Dominion Diamond Marketing N.V., a subsidiary of Dominion Diamond Corporation, will conduct viewings of its rough diamond sales at the Special Notified Zone (SNZ) at Mumbai’s Bharat Diamond Bourse from February 2016.

The company will make a range of parcels available for inspection. After the viewing is complete, the tender will take place in Antwerp. The viewing dates in Mumbai in 2016 are: February 1-6; March 7-12; April 4-9; May 23-28; June 20-25; and August 1-6.

Blue Nile Starts Estate Jewelry Collection

Blue Nile has launched an estate jewelry collection that includes creations by Marina B and J.E. Caldwell & Co., according to a Blue Nile statement December 3.

The collection is starting with 13 pieces in three price categories: under $10,000, under $20,000 and under $100,000. Among the products at the highest price level are an Art Deco necklace featuring an emerald-cut, 3.47-carat diamond; a platinum choker necklace with over 12 carats of diamonds; and a pair of fancy, intense yellow diamond drop earrings set in 18-karat yellow gold and platinum.

RETAIL & WHOLESALE 	  

U.S. Polished Imports -4%

U.S. polished diamond imports fell 4% year on year to $2.16 billion in October, according to data from the U.S. Census Bureau. Polished imports by weight increased 3% to 1.074 million carats. Polished diamond exports, meanwhile, fell 13% to $1.33 billion, driving net imports up 17% to $833 million.

Rough diamond imports slumped 58% in October to $17 million, while rough exports fell 38% to $24 million, leaving net rough imports at negative $7 million compared with positive $1 million a year earlier. The net diamond account, reflecting the difference between net imports and exports, increased 16% to $826 million.

Sotheby’s Takes $52M at New York Auction

Sotheby’s achieved total sales of $52.2 million at its Magnificent Jewels auction in New York on December 9, bringing in almost $4.3 million for the highest-profile lot, a Van Cleef & Arpels diamond necklace worn by the late Queen Nazli of Egypt.

The bib-style piece was commissioned by the Queen for her daughter’s wedding in 1939. Estimated pre-auction at $3.6 million to $4.6 million, it features 217 carats of diamonds in a ‘sunburst’ motif: at the center is a 6-carat round diamond, with 118 larger round diamonds weighing approximately 134 carats, a further 27 carats of smaller round diamonds and 50 carats of baguette diamonds.

The highest selling price at the auction was for an “exceptional” platinum, 25.87-carat sapphire and 0.4-carat diamond ring which went for $5.1 million, beating its estimate of $3.5 million to $4.5 million.

Bonhams Sets Auction Records

Bonhams sold a 2.97-carat diamond ring for $2.2 million (GBP 1.5 million), including the premium, at its fine jewelry auction in London on December 5, setting two world records. The step-cut diamond, set in a ring designed by jeweler Andrew Grima, fetched the highest-ever auction price per carat for a fancy greyish-blue diamond and also set a record for a Grima creation.

The auctioneer also sold a pair of late nineteenth-century sapphire and diamond earrings for $2.3 million. A 10.28-carat Madagascan ruby single-stone ring sold for $357,687 – another world record for price per carat.

Walmart Adds In-Store Payment with App

Walmart has introduced a new payment feature on its mobile app that allows customers to pay for goods in-store using a smartphone.

The U.S. retail giant is the only retailer to offer its own payment solution that works with any iOS or Android device capable of downloading it and with any major credit, debit or pre-paid card or Walmart gift card, according to a statement December 10.

The new service will be introduced in select Walmart stores from December, with a nationwide launch to be complete by the first half of 2016.

J.C. Penney Presents 2015 Christmas Gift Ideas

J.C. Penney has unveiled its Christmas gift ideas for the 2015 holiday season. Recommendations include a diamond twist heart necklace from the Heart of Hallmark Collection by Hallmark Diamonds. The piece features between 0.01 and 0.08 carats of round diamonds in 14 karats of rose gold over sterling silver, according to a J.C. Penney statement December 2.

Also on the U.S. national retailer’s list of gift suggestions are a pair J.C. Penney solitaire earrings with 0.25 carats of diamonds and 14 karats of gold; gold-tone metal double-drop earrings with red and purple stones, designed by Liz Claiborne; and a J.C. Penney crystal-bubble watch and bracelet set.

MINING 	  

ALROSA to Stick to Long-Term Contracts

ALROSA will keep long-term contracts as the “cornerstone” of its sales policy because it gives the company and clients a stable supply of rough diamonds and protection against market fluctuations, the miner told clients Wednesday.

The Russian company followed a “conservative” sales policy throughout 2015, cutting both prices and sales volumes, according to a statement December 9. The group met with long-term clients to go over the year’s preliminary results and discuss market trends. It said experts were reporting signs of recovery in rough diamond demand and expect the market to stabilize in the second quarter of 2016.

De Beers Ceases Work at Canadian Mine

De Beers is to immediately cease mining at its Snap Lake mine in Canada. The move comes following a review of its operations, particularly in light of current market conditions.

The company has put the mine on “care and maintenance” and expects this status to last for one to nine months. The decision has resulted in 434 employees being laid off. The company will evaluate market conditions over the next year to determine whether the resources at the mine make it viable, according to a De Beers statement December 4. Environmental monitoring and other work required under the terms of the mine’s permits will continue in the meantime.

ALROSA to Increase Production in 2016

ALROSA expects to increase diamond production to 39 million carats in 2016, Russian news source Interfax reported December 8, citing company president Andrei Zharkov. This compares with 38 million carats which the Russian miner is on track to recover for 2015.

“Production volumes remain in line with the targets factored into the companys long-term development program, in other words about 39 million carats,” Interfax cited the executive as saying in an interview with the miners media outlet. "We expect that the situation on the rough and cut diamond market should stabilize next year. And in general, we expect that there might be an improvement in the second half of the year.”

The news comes despite ALROSA’s first vice president, Ilya Ryashchin, saying in a call with analysts in November that the miner might “reconsider” its production volumes because of the size of its inventory.

GENERAL 	  

Pakistani Wants Koh-i-Noor Returned

A Pakistani attorney has filed a petition with the High Court in Lahore, naming Queen Elizabeth II as a respondent. Iqbal Jaffree is demanding the return of the Koh-i-Noor diamond, the 105.6-carat gem which forms part of the British crown jewels, Reuters reported December 4.

Jaffree claims that the diamond belongs to Pakistans Punjab province, as it was taken by the British from the King of Lahore during colonial rule. The stone is famous for its prominence in the crown worn by the late Queen Elizabeth, the Queen Mother, at her coronation in 1937, and again at the coronation of Queen Elizabeth II in 1953.

In November 2015, a group of Bollywood stars and Indian businessmen launched a similar claim in London’s High Court, demanding the return of the diamond to India.

New Book Stoned Tells How Eight Jewels Shaped History

A new book, Stoned: Jewelry, Obsession, and How Desire Shapes the World, has been published, telling the story of how eight gems in history have started cultural movements, political dynasties and wars.

It is written by jeweler and scientist Aja Raden, former head of the auction division of House of Kahn Estate Jewelers. The 368-page book, released by Ecco, an imprint of HarperCollins Publishers, delves into the “unshakable addiction to beauty and the darker side of human desire,” according to the publisher’s website.

ECONWATCH 	  

Diamond Industry Stock Report

Miner Anglo American fell 16.5% after it announced a major cost-cutting overhaul. Stellar Diamonds, another UK-listed miner, dropped 17.4%. Mining stocks were led by True North Gems (+6.5%) after it commenced mining at its Greenland project, but Rockwell Diamonds (-11.5%) and Shore Gold (-12.2%) both fell. U.S. stocks were mixed, with Sotheby’s (-9.9%), Movado Group (-6.6%) and Signet (-6.5%) all slipping.

View the detailed industry stock report.
Dec. 10 (12:00 GMT) Dec. 03 (10:30 GMT) Chng.
$1 = Euro 0.91 0.95 -0.034
$1 = Rupee 66.75 66.69 0.1
$1 = Israel Shekel 3.87 3.88 -0.02
$1 = Rand 15.17 14.34 0.83
$1 = Canadian Dollar 1.36 1.33 0.02

Precious Metals Chng.
Gold $1,075.01 $1,050.70 $24.31 2.3%
Platinum $860.50 $830.50 $30.00 3.6%
Silver $14.21 $13.94 $0.27 1.9%

Stock Indexes Chng.
BSE 25,252.32 25,886.62 -634.30 -2.5%
Dow Jones 17,492.30 17,729.68 -237.38 -1.3%
FTSE 6,099.44 6,431.72 -332.28 -5.2%
Hang Seng 21,704.61 22,417.01 -712.40 -3.2%
S&P 500 2,047.62 2,079.51 -31.89 -1.5%
Yahoo! Jewelry 937.27 989.47 -52.20 -5.3%

Rapaport Weekly Market Comment December 17, 2015

Polished market sentiment improving. Rough prices higher than resultant polished, significantly restricting rough trading and diamond production. Shortages supporting polished prices but reducing sales during important holiday season as dealers fill last-minute orders. Chinese New Year demand improving but very cautious. Rough prices remain high at De Beers est. $180M sight and small ALROSA sale. Sightholders expect rough price cuts in 2016. Dominion 3Q profit -90% to $3.4M. Christie’s NY sells $60M (71% by lot) with rectangular 31.34ct., D, VVS2 diamond sold for $4.3M ($138K/ct.). Belgium Nov. polished exports -12% to $920M. Yoram Dvash elected Israel Diamond Exchange president.

RapNet Data: December 17

Diamonds 1,126,160
Value $8,156,371,755
Carats 1,256,785
Average Discount -28.11%

www.rapnet.com

The RapNet Diamond Index (RAPI) is the average price for the top 25 diamond qualities (D-H, IF-VS2). It is based on the 10 best priced diamonds for each quality.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

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7-11
Thu-Mon

Rapaport Rough Auction

Surat, India

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January
12-20
Tue-Wed

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13-20
Wed-Wed

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QUOTE OF THE WEEK
Believe it or not, brides are taking an active role in their engagement, too. In fact, more brides than ever are researching what they want in a ring and dropping hints to their husband-to-be. Our study even reveals that a majority of brides know the cost of their engagement ring.

Kellie Gould, editor-in-chief of The Knot, on The Knot 2015 Jewelry & Engagement Study

MARKETS 	  	 

United States: Sentiment improving as dealers fill last-minute Christmas orders. Dealers are looking for goods but demand is order-specific with shortages restricting sales and very limited buying to build up inventory...

Belgium: Dealers are busy filling last-minute orders before the market closes for two-week Christmas vacation (Dec. 21-Jan. 4). Good demand for 0.30-1ct., G-J, VS-SI (3X, none) diamonds...

Hong Kong: Activity improved with lots of inquiries from Chinese and Indian buyers but few sales. Dealers are cautious and uncertain about the upcoming Chinese New Year season (Feb.😎 amid weak consumer sentiment...

India: Market continues steady improvement since Diwali. Polished inventory diminishing due to steady holiday orders and very low manufacturing output...

Israel: Polished trading stable with steady demand for 0.30-1.99ct., D-J, VS-SI diamonds and a shortage of goods on the market. Prices supported by scarce availability and last-minute U.S. holiday demand...

Click here to continue reading

INSIGHTS 	  

Rough Diamond Market Stand-Off May Yet Prove Costly

Now that 2015 is coming to an end, mining companies are reportedly preparing to reduce rough diamond prices in January. Having held off from doing so in the fourth quarter of this year, the industry may be missing an opportunity...

Click here to continue reading

INDUSTRY 	  

Rough Producers May Cut Prices Further: Moody’s

Rough diamond producers will have to slash prices further as a 28% slump from a peak in 2014 may be insufficient to revive demand, according to Moody’s Investors Service.

Miners will remain under pressure over the next 12 to 18 months because of slowing jewelry sales and cutters and polishers’ reduced access to credit, which have caused a temporary mismatch between supply and demand, the credit rating agency said in a report December 14. Rough diamonds prices have fallen 18% in the first 11 months of 2015 and dived since 2014, according to the company.

Belgium’s Polished Exports -12%

Belgium’s polished diamond exports dropped 12% year on year to $920.4 million in November, according to the Antwerp World Diamond Centre (AWDC). By volume, exports slid 16% to 382,491 carats, while the average price fell 5% to $2,406 per carat.

Total polished imports dived 17% to $770.2 million during the month as net polished exports, representing exports minus imports, soared 33% to $150.2 million. Rough imports slumped 43% to $709.3 million and rough exports plummeted 54% to $643.4 million. Net rough imports, representing imports minus exports, moved from negative $171 million to positive $65.8 million during the month.

Belgium’s November net diamond account, representing total polished and rough exports less total imports, dived 70% to $84.4 million.

Dvash Elected Israel Bourse President

Yoram Dvash has been elected president of the Israel Diamond Exchange (IDE) replacing Shmuel Schnitzer at the helm of the bourse for the next two years.

Dvash, owner of Y. Dvash Diamonds, won 1,080 votes compared to Arnon Yuval’s 761, the bourse said in a statement December 17.

Schnitzer concludes his time as IDE president having previously served between 1998 and 2004 and again since 2013.

JA Revamps Web Presence

U.S. trade association Jewelers of America (JA) has introduced a “consumer-facing” website with expanded educational tools to improve confidence among potential buyers.

New features are designed to showcase the trade body’s retail and supplier members to potential customers browsing the internet to make purchases, as well as impart knowledge about jewelry. It presents information on retailers for consumers and showcases suppliers to retailers.

IDCA Elects New Leaders

The Indian Diamond & Colorstone Association, Inc. (IDCA) unanimously elected a new executive committee for 2016, choosing Pioneer Gems’ Ashok Sancheti as president.

Rakesh Barmecha of Niru NY Ltd. was elected vice president, Amikam’s Jay Mehta is secretary, Nirav Doshi of Jewelex NY Ltd. is treasurer and Prateek Nigam of Oriental Gemco (NY), Inc. will serve as joint secretary.

India to Unveil Special Notified Zone

The India Diamond Trading Centre (IDTC), the first Special Notified Zone (SNZ) for rough diamond trading in the country, will be inaugurated at the Bharat Diamond Bourse (BDB) complex in Mumbai on December 20.

The SNZ, an initiative between India’s Gem and Jewellery Export Promotion Council (GJEPC) and the BDB, will be unveiled by chief guest Nirmala Sitharaman, the Minister of State (Independent Charge) for Commerce and Industry. Senior executives from miners such as ALROSA, De Beers and Rio Tinto are set to attend the opening ceremony.

OGI Opens Belgium Base

Diamond technology company OGI Systems Group has opened a service center in Belgium as part of a plan to expand its business in Europe.

The new offering features the company’s DiaPix technology, which is used to capture high-definition images and videos of diamonds. The center will also feature the Israeli firm’s GemScribe, an automatic inscription system for diamond and gemstones.

RETAIL & WHOLESALE 	  

U.S. Jewelry Store Sales Flat

U.S. specialty jewelry store sales fell 0.4% year on year to $2.15 billion in October, according to the U.S. Census Bureau. The monthly loss comes despite an estimated 2% rise in jewelry and watch sales in October across all retail outlets to $5.29 million. After adjusting for seasonal fluctuations, specialty jewelry store sales climbed 0.1% to $2.51 billion.

Jewelry store sales in the first 10 months of the year have slipped 1.5% to $22.1 billion. The seasonally-adjusted figure is $25.28 billion, a 1.4% drop.

U.S. Jewelry Prices -1%

The U.S. consumer price index (CPI) for jewelry fell 1.4% in November from the previous month, according to the U.S. Bureau of Labor Statistics. The reading was 3.2% lower from a year ago.

The November CPI for watches slipped 1.3% from a month ago and 1.1% from a year earlier. The CPI for all urban consumers was unchanged.

Christies Sells $60M at New York Auction

Christie’s sold $59.7 million of jewelry at its New York auction on December 10, selling the event’s top lot, the ‘Victory’ diamond, for $4.3 million.

The rectangular-cut, 31.34-carat, D-color ring commemorating the Allied victory in World War II fetched $137,492 per carat at the Magnificent Jewels auction.

In total, 11 lots were auctioned for at least $1 million each, and four fetched more than $3 million apiece. Christies sold 71% by lot and 77% by value.

TOUS Picks Paltrow for Ad Campaign

Spain-headquartered jewelry brand TOUS has signed up Oscar-winning actress Gwyneth Paltrow as the star of its upcoming global advertising campaign.

Paltrow will appear in the campaign “Tender Stories Nº4,” which is aimed at depicting “tenderness as a universal TOUS value.” She will tell viewers a story that “aims to further explore the brands essential value with a cool, intelligent, moving and fun tone.”

Steady Rise in Engagement Ring Spend

The average amount men spend on an engagement ring in the U.S. has increased to $5,978, according to the latest survey by popular online wedding resource The Knot.

The figure represents an 11% increase on the average spend in 2013, according to The Knot 2015 Jewelry & Engagement Study, which polled more than 12,000 brides and 1,200 grooms in the U.S. who were either engaged or married from 2014 to early 2015.

Those receiving a non-diamond stone rose from 6% in 2013 to 8%. The most popular diamond cut was round, accounting for 49% of gems, followed by princess (22%) and cushion (6%). The halo setting has soared in popularity from 7% in 2011 to 22% in the 2015 survey.

Kay Lures Customers with Online Game

Kay Jewelers has introduced an online memory game with a jewelry prize every day as the U.S. retailer steps up its holiday-season marketing campaign.

Visitors to Kay’s social media channels will be encouraged to take part in an interactive holiday-themed card-matching game, “Merry Match Sweepstakes,” on a dedicated website for a chance to win a prize from the company’s featured daily collection.

One winner will be selected each day and receive a piece of jewelry from a range of brands. Participants can also share a link to the game on Facebook and Twitter to earn a bonus entry for each friend who enters using the link they post.

Bailey Banks & Biddle Re-Opens in Austin

Jewelry retail chain Bailey Banks & Biddle has re-opened its location at Austin in Texas as part of an expansion plan in the U.S. state.

The new store is in the city’s Barton Creek Square shopping mall. It comprises a “highly branded and inviting” interior design with shop-in-shop fixtures from bridal designers such as Simon G and Kirk Kara and luxury Swiss watch brands including Oris, Tissot and Longines.

Pomellato Gets New CEO

French luxury goods company Kering has appointed Sabina Belli as chief executive officer of the Pomellato group, after acquiring the Italian jewelry brand in 2013.

Belli, a former executive at LVMH Moët Hennessy Louis Vuitton, will be responsible for the Pomellato and Dodo brands, effective immediately. She will report to Albert Bensoussan, CEO of Kering’s watches and jewelry division.

Gilt Groupe Close to $250M Takeover

Online retailer Gilt Groupe Inc. is close to a deal to sell itself for about $250 million to Hudson’s Bay Co., the owner of Saks Fifth Avenue, The Wall Street Journal reported.

That price compares with the reported $1.1 billion value that venture capitalists had put on the New York-based company in 2011.

Gilt, which sells a range of home and personal items on its website, including fashion, jewelry and furniture, was a pioneer of ‘flash sales’ that became popular during the recession, offering short-term promotions on specific items.

MINING 	  

Dominion’s 3Q Profit -90%

Dominion Diamond Corporation reported a 90% drop in profit year on year to $3.4 million in the third quarter that ended October 31 as margins declined at the company’s Canadian mines. Revenue declined 35%, mainly due to a large drop in the average price per carat of sales from the Ekati Diamond Mine.

Rough sales were restrained by difficult polished market conditions and were further impacted by a drop in the level of rough diamond manufacturing capacity, Dominion said. The company lowered prices at the August sale and prices at the second sale of the quarter were flat.

Petra Sells $86M at Tender

Petra Diamonds sold 606,080 carats for $86.2 million at its second tender of the first half of fiscal year 2016 ending December 31, 2015. The figures include the sale of a 23.16-carat pink stone from the Williamson mine in Tanzania for $10.1 million and unsold parcels from the first tender of the six-month period.

The average price surged 43% over the first tender to $142 per carat, driven by an improvement in product mix that outweighed flat pricing. The miner expects the product mix to be better in the full fiscal year to June 30, 2016.

Stornoway’s 2Q Profit -12%

Canadian exploration and development company Stornoway Diamond Corporation reported a 12% year-on-year drop in net profit to $7.5 million (CAD 10.3 million) in the second quarter that ended October 31. Profit was impacted by several items not reflective of Stornoway’s underlying operating performance, according to the company.

Progress at the Renard Diamond Project is continuing, with first ore scheduled to be delivered to the plant in the second half of 2016 and commercial production set for the second quarter of 2017, in line with earlier forecasts.

GENERAL 	  

Hong Kong Show Confirms 2016 Dates

The Hong Kong Trade Development Council (HKTDC) has announced the 2016 dates of its key jewelry shows, the HKTDC Hong Kong International Jewellery Show and the HKTDC Hong Kong International Diamond, Gem & Pearl Show.

The third edition of the HKTDC Hong Kong International Diamond, Gem & Pearl Show will take place March 1 to 5, 2016, at the AsiaWorld-Expo.

The 33rd edition of the HKTDC Hong Kong International Jewellery Show will run March 3 to 7 at the Hong Kong Convention & Exhibition Centre.

ECONWATCH 	  

Diamond Industry Stock Report

Anglo American shares (-12.7%) continued to slide on news of its restructuring. Miners Peregrine Diamonds (-14.3%) and Kennady Diamonds (-7.8%) both slipped, while Petra Diamonds rose 11.1% on results from its rough tender. Indian stocks were led by jewelry manufacturer Goldiam International (+28.5%), with others generally stable. Out of U.S. retail stocks, Birks Group (-16.7%) suffered the largest percentage drop, with J.C. Penney (-6%) and Macy’s (-6%) among others that declined.

View the detailed industry stock report.
Dec. 17 (10:10 GMT) Dec. 10 (12:00 GMT) Chng.
$1 = Euro 0.92 0.91 0.007
$1 = Rupee 66.44 66.75 -0.3
$1 = Israel Shekel 3.89 3.87 0.02
$1 = Rand 14.94 15.17 -0.22
$1 = Canadian Dollar 1.38 1.36 0.03

Precious Metals Chng.
Gold $1,067.50 $1,075.01 -$7.51 -0.7%
Platinum $863.75 $860.50 $3.25 0.4%
Silver $14.11 $14.21 -$0.10 -0.7%

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Yahoo! Jewelry 999.35 937.27 62.08 6.6%