Rapaport Weekly Market Comment December 24, 2015

Trading centers quiet due to holidays. Dealers filling last-minute orders with very limited inventory buying due to uncertainty about post-U.S. holiday season and Chinese New Year. U.S. retail sales steady but store traffic slower than previous years. Millennials changing buying patterns with comScore reporting 50-60% jump in mobile sales. U.S. Nov. jewelry sales +3%. Manufacturers anticipate 5-10% rough price decline with improvement in quality hiding some of the price drop. Miners end 2015 with very large inventory. ALROSA in talks with Gokhran, expects 2016 sales of $3.5B, production +3% to 39M cts. India Nov. polished exports -15% to $1.3B, rough imports -60% to $625M. The Rapaport Price List will not be published next week. We wish everyone a happy, healthy, ‎prosperous and peaceful New Year.

RapNet Data: December 24

Diamonds 1,084,923
Value $7,909,601,547
Carats 1,223,953
Average Discount -28.17%

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.

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January 12-20 Tue-Wed

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QUOTE OF THE WEEK
By establishing the Special Notified Zone in India, the ready availability of rough diamonds in India through the India Diamond Trading Centre will make a huge difference as the manufacturers won’t have to travel across the world to procure diamonds.

Gem & Jewellery Export Promotion Council chairman Praveenshankar Pandya at the launch of the IDTC in Mumbai on December 20

MARKETS 	  

United States: Positive mood as wholesalers close for the holiday season. Diamond dealers focused on filling last-minute orders and finding it difficult to increase prices and improve margins....

Belgium: Trading activity quiet with bourses closed for a two-week Christmas / New Year break. Some dealers looking for deals and filling last-minute orders...

Hong Kong: Polished trading stable with dealers filling Christmas orders and some Chinese New Year demand. Good demand for 0.30-0.40ct., D-J, VS-SI GIA-dossiers with notable shortages in the market...

India: Polished trading steady with some U.S. orders. Far East demand better but cautious. Sentiment improved as prices firmed since Diwali due to shortages, particularly for RapSpec A2 (3X, none) 0.30-0.49ct., D-J, VS-SI diamonds...

Israel: Polished market stable. Steady U.S. orders. Slight improvement in Far East demand. Prices firm due to shortages rather than significant increase in demand and transactions...

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INSIGHTS 	  

Diamond Story of the Year: Return of Generic Advertising

Star Wars was not the only force making a come-back in 2015. The return of generic advertising brought with it a promise of increased profitability for the diamond trade...

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INDUSTRY

India’s Polished Exports -15%

India’s polished diamond exports declined 15% to $1.32 billion year-on-year in November, according to provisional data from the Gem & Jewellery Export Promotion Council. By volume, polished exports fell 16% to 2.2 million carats. Polished imports nosedived 72% to $147.4 million, leaving net exports – polished exports minus imports – 14% higher at $1.17 billion.

Rough diamond imports plummeted 60% to $624.9 million and rough exports slumped 34% to $62.1 million, leaving net imports – rough imports minus exports – 61% lower at $562.8 million. India’s net diamond account, which is calculated as the difference between net polished exports and net rough imports, increased from negative $422 million in November 2014 to positive $612.1 million this year.

India Opens First Special Notified Zone for Rough Trading

The Gem & Jewellery Export Promotion Council (GJEPC) and Bharat Diamond Bourse (BDB) opened the India Diamond Trading Centre (IDTC) in Mumbai, India’s first Special Notified Zone (SNZ) for rough diamond trading, on December 20.

Nirmala Sitharaman, India’s Minister of State (Independent Charge) for Commerce and Industry, inaugurated the facility at a ceremony attended by state lawmaker Ashish Shelar and Mumbai’s deputy mayor Alka Kelkar, as well as executives from Rio Tinto Diamonds, ALROSA and De Beers.

Ahmed Bin Sulayem Appointed UAE’s KP Chair

The United Arab Emirates’ (UAE) Ministry of Economy has selected Ahmed Bin Sulayem, chairman of the Dubai Multi Commodities Centre, as the country’s chair of the Kimberley Process (KP) for 2016.

Sulayem will be responsible for official duties in 2016 and implementing new initiatives in line with the KP’s aims and objectives. The UAE was appointed as KP chair in November.

India Keeps Spotlight on Synthetic Detection

India’s Gem & Jewellery Export Promotion Council (GJEPC) will establish a Natural Diamond Monitoring Committee (NDMC) in Surat following the success of its counterpart in Mumbai, chairman Praveenshankar Pandya said.

The Indian gem and jewelry industry is also working to ensure businesses can install detection machines in their offices, Bharat Diamond Bourse (BDB) president Anoop Mehta said.

The news follows the conclusion of the Diamond Detection Expo and Symposium, organized by the GJEPC and BDB, which ran December 15 to 16 in Mumbai. The BDB banned trading in synthetics on the exchange’s premises earlier this year following a members’ vote.

RETAIL & WHOLESALE 	  

Holiday Mobile Sales Soar

Mobile sales this holiday season have surged 50% to 60% over last year’s season, according to data analytics group comScore.

Amazon has had the strongest season for mobile sales, according to Gian Fulgoni, executive chairman and co-founder of comScore, while multi-channel retailers such as Target and Walmart were early adapters of this trend toward mobility.

Amazon received almost as many website visits as the next three retailers put together – at least 4.8 billion, compared with a combined 4.9 billion for eBay, Walmart and Target.

Swiss Watch Exports -6%

Swiss watch exports fell 6% year-on-year to $1.97 billion (CHF 1.95 billion) in November as outbound shipments to Hong Kong slumped, according to figures provided by the Federation of the Swiss Watch Industry. The total value failed to exceed $2.03 billion (CHF 2 billion) in November for the first time in five years. By volume, the drop was 3.8% to 2.4 million watches.

Exports to Hong Kong dived 28% to $250.7 million. Exports to the U.S. slipped 5% to $240.5 million. Exports to the U.K. surged 14% to $122.6 million, while Japan grew 9% to $120.1 million. China advanced 17%.

Luk Fook Opens Toronto Store

Luk Fook Holdings (International) Ltd opened its largest retail store outside mainland China, Hong Kong and Macau, choosing a new location in Greater Toronto.

The store at Markville Shopping Centre in Markham, on the edge of the Canadian city, is the company’s second in the country. Its other shop is near Vancouver.

GJF Criticizes New PAN Card Rules

The All India Gems & Jewellery Trade Federation (GJF) criticized new rules that slashed a threshold above which a customer must show their Permanent Account Number (PAN) by 60%.

New rules make the disclosure mandatory in jewelry purchases above the rupee equivalent of $3,026 (INR 200,000), compared with a previous limit of $7,564 (INR 500,000), according to a GJF statement.

“This is not practical and will discriminate against 70% of the rural buyers, including farmers, as they are not under the tax net and do not have PAN cards,” GJF chairman G. V. Sreedhar said.

Carl F. Bucherer Opens Dubai Boutique

Swiss watchmaker Carl F. Bucherer opened a boutique at The Dubai Mall this month.

Guests at the inauguration were the company’s chief executive officer Sascha Moeri and two representatives of Dubai watch retailer Rivoli Group: CEO Ramesh Prabhakar and COO Abraham Koshy.

“The Middle East is moving forward with Dubai being the key entrance into the market,” Moeri said.

MINING 	  

Dominion Reportedly Exploring Sale

Dominion Diamond Corp. hired financial advisers to explore the potential for a sale, Bloomberg reported, citing people familiar with the matter. The news comes amid pressure on the Canadian miner from shareholders over the company’s plummeting share price.

Dominion confirmed it retained Rothschild & Co earlier this year “to assist the company and its board of directors in considering a number of possible initiatives to maximize shareholder value,” but said there can be no assurance that any deal will result.

Toronto-based hedge fund K2 & Associates Investment Management, which leads a shareholder group that together owns 5.4% of Dominion’s stock, claimed December 21 the miner’s share price has suffered from “misguided policies and missed opportunities.” Shares have dived 45% this year, the Bloomberg report said and added the stock climbed on Tuesday.

Dominion also announced December 24 that two directors had resigned from the company’s board “for personal reasons.”

ALROSA Expects 2016 Sales of $3.5B

ALROSA expects to sell $3.5 billion of diamonds in 2016 as growth in demand for precious stones remains minimal, the Russian miner guided. The company forecast production will rise 2.6% to 39 million carats next year.

Separately, ALROSA is discussing a deal with Gokhran, Russia’s state repository, to sell it rough diamonds, Interfax reported December 22, citing Russia’s Deputy Prime Minister Yuri Trutnev.

Botswana Diamonds Raises $813K

Botswana Diamonds raised $813,099 (GBP 545,316) through an issue of 64.2 million shares to finance exploration activities in Botswana and provide additional working capital.

The diamond exploration group raised $683,882 through a private placement of 54 million new shares. The company has settled a further $129,217 of existing liabilities with certain directors through a conditional issue of 10.2 million new shares.

Gemfields Sells Rough Rubies for $318/ct

Gemfields plc reported revenue of $28.8 million from an auction of higher- and medium-quality rough rubies from the Montepuez ruby deposit in Mozambique.

The company achieved an average price of $318 per carat, selling 90,642 out of 92,136 carats, or 45 out of 49 lots. It sold 98% by weight and 95% by market value. The stones were extracted by subsidiary Montepuez Ruby Mining Limitada.

Some 36 companies participated in the bid, which took place in Singapore from December 14 to 18.

Diamcor Achieves $150/ct Average Price

Diamcor Mining sold 2,404 carats at an average price of $150 per carat at its second tender of rough diamonds in the third quarter from its Krone-Endora at Venetia project in South Africa. The miner got $360,016 in revenues from the sale.

Combined sales in the quarter surged 95% to 9,469 carats. Revenue soared 78% to an estimated $1.2 million compared with sales in the previous period. The average price per carat slipped 9% to $127, compared with $140 in the second quarter, in line with the company’s expectations off the back of market conditions.

ALROSA Recovers 105.6-Carat Gem

ALROSA recovered a 105.6-carat diamond from its Jubilee kimberlite pipe. The gem is a transparent octahedral with a moderate yellowish hue and small olivine, graphite and sulphide inclusions.

The Russian miner’s Aikhal Mining and Processing Division at processing plant no.14 extracted the diamond.

GENERAL 	  

Anglo American Donates to DDI

The charitable arm of De Beers parent company Anglo American plc has made a three-year contribution to the Diamond Development Initiative International (DDI), which promotes responsible sourcing and improves the lives of artisanal diamond miners and their families in Africa.

The funding from Anglo American Group Foundation enables the DDI to carry out its principle functions, including the registration of artisanal miners, implementation of the Development Diamond Standards at mining sites and development support for communities in need such as clean water and education.

ECONWATCH 	  

Diamond Industry Stock Report

Mining stocks were generally strong this week, led by Kennedy Diamonds (+28%) on news of a positive sample grade from its Kelvin mine. Dominion Diamond Corp. jumped 21 percent on reports of a potential takeover. Other risers were Gem Diamonds (+24%), Petra Diamonds (+23%), Rockwell Diamonds (+18%) and Peregrine Diamonds (+17%). As the holiday shopping season closes, U.S. retail stocks changed little, except Birks Group (-6.6%) and Nordstrom (-4.7%). India’s Gitanjali Gems rose 14%.

View the detailed industry stock report.
Dec. 24 (10:00 GMT) Dec. 17 (10:10 GMT) Chng.
$1 = Euro 0.91 0.92 -0.008
$1 = Rupee 66.07 66.44 -0.4
$1 = Israel Shekel 3.90 3.89 0.01
$1 = Rand 15.23 14.94 0.28
$1 = Canadian Dollar 1.39 1.38 0.00

Precious Metals Chng.
Gold $1,073.90 $1,067.50 $6.40 0.6%
Platinum $875.75 $863.75 $12.00 1.4%
Silver $14.34 $14.11 $0.23 1.6%

Stock Indexes Chng.
BSE 25,842.44 25,803.78 38.66 0.1%
Dow Jones 17,602.61 17,749.09 -146.48 -0.8%
FTSE 6,249.53 6,147.22 102.31 1.7%
Hang Seng 22,138.13 21,872.06 266.07 1.2%
S&P 500 2,064.29 2,073.07 -8.78 -0.4%
Yahoo! Jewelry 1,007.05 999.35 7.70 0.8%

Rapaport Weekly Market Comment December 31, 2015

U.S. consumer confidence improves with overall holiday retail sales +7.9%, according to MasterCard SpendingPulse. Mobile and online sales soar. Diamond trade cautious about the Chinese New Year as China-Hong Kong jewelry sales slowed in 2015. RAPI for 1ct. diamonds +1.5% in December as difficult year ends on a positive note. Polished prices supported by shortages rather than rise in demand. Dealers more optimistic but profit concerns continue into 2016. Cutters not willing to raise polished production at current rough prices. The Rapaport Price List is not being published this week (Jan. 1). The Rapaport Group wishes everyone a happy, healthy, ‎prosperous and peaceful New Year.‎

RapNet Data: December 30

Diamonds 1,043,455
Value $7,546,193,201
Carats 1,186,710
Average Discount -28.37%

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
January 7-11 Thu-Mon

Rapaport Rough Tender

Surat, India

View Details January 12-20 Tue-Wed
Rapaport Melee Auction

New York & Dubai

View Details
January 13-20 Wed-Wed

Rapaport Single Stone Auction 

New York & Israel

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MARKETS 	  

United States: Polished trading quiet as wholesalers and dealers took vacation between Christmas and New Year. Sentiment improving amid reports of a positive holiday shopping season and some orders for Valentine’s Day...

Belgium: Polished and rough trading very quiet with most dealers on vacation during the Christmas to New Year period. Antwerp bourses are closed until January 4...

Hong Kong: Polished market quiet over Christmas-New Year with many dealers on vacation. Some trading activity to fill orders from Mainland China for the Chinese New Year (Feb.😎...

India: Positive sentiment in the market. Prices firm due to shortages in RapSpec A2 (3X, none) diamonds while holiday demand was okay. Good U.S. demand for 1ct., G-J, SI2-I2 diamonds...

Israel: Polished trading stable and sentiment continues to improve. Steady demand with shortages supporting prices for RapSpec A2 (3X, none) 0.30-0.90ct., D-J, VS-SI and 1ct., G-J, SI-I2 diamonds...

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HAPPY NEW YEAR 	  

INDUSTRY 	  

UAE Pact to Supervise Rough Trade

The Ministry of Economy of the United Arab Emirates (UAE) and the Dubai Multi-Commodities Centre (DMCC) have agreed to enhance coordination so that the supervision of the country’s rough diamond trade will be in line with the Kimberley Process (KP) Certification Scheme.

The memorandum of understanding comes as the UAE is about to take chairmanship of the KP on January 1, 2016.

Lazare Kaplan Subject to SEC Action

The Securities and Exchange Commission (SEC) has filed administrative proceedings against Lazare Kaplan International Inc. alleging the New York diamond manufacturing firm failed to submit periodic reports since February 2009.

The SEC will consider whether to suspend trading in the company’s shares for up to 12 months or revoke its registration, according to a filing December 8.

In a response December 21, the company said successfully resolving "material uncertainties" would let the company finalize its financial statements and file the relevant forms.

FTC Seeks Feedback on Jewelry Guides

The Federal Trade Commission (FTC) is seeking comments by April 4, 2016, on the latest draft of proposed changes to the FTC Guides for the Jewelry Industry.

The FTC proposes to revise its guidance on below-threshold alloys, precious metal content of products containing more than one precious metal, surface application of precious metals, lead-glass filled stones, synthetic diamonds, pearl treatments, varietals and misuse of the word ‘gem,’ an FTC statement said.

IDE Appoints Advisory Council, New Board

Yoram Dvash, the new president of the Israel Diamond Exchange (IDE), has set up a Presidents Consultative Council body comprising leading industry figures.

Former presidents Shmuel Schnitzer, Avi Paz and Yair Sahar, who are all honorary presidents of the IDE, are joined on the new council by Jacob (Kobi) Korn, president of the Israel Diamond Manufacturers Association (IsDMA) and a recent acting president of the IDE; and Moti Ganz, chairman of the Israel Diamond Institute and a former president of IsDMA. They will hold regular meetings to advise Dvash on current matters.

Dvash also appointed a new board and chairs of committees after being elected mid-December. Yehezkel Blum, formerly vice president of the IDE, is now executive vice president, while Shalom Papir has been appointed senior deputy president.

Bank Opens Dubai Diamond Financing Base

The National Bank of Fujairah (NBF) opened its diamond financing office in the Dubai Multi Commodities Centre (DMCC). This comes after the United Arab Emirates bank set up a diamond financing team in April 2015 to fund manufacturers and traders of rough and polished stones.

The unit, based in the Almas Tower, has more than 70 clients, according to the bank. The facility was inaugurated by Ahmed Sultan Bin Sulayem, executive chairman of the DMCC, and senior figures from the NBF and the DMCC.

RETAIL & WHOLESALE 	  

U.S. Holiday-Season Sales +8%

U.S. retail sales grew 7.9% during the shopping season from Black Friday to Christmas Eve, according to the MasterCard SpendingPulse. The survey tracks sales using cards, cash and checks, excluding automobiles and gasoline purchases.

Ecommerce was among the biggest winners this holiday season, growing about 20% from a year ago, MasterCard Advisors said December 28. According to the company’s recent Omnishopper Guide, 70% of U.S. consumers report doing more research online than before.

Amazon Mobile Shopping Soars this Holiday

Customers shopping on Amazons mobile app more than doubled this holiday, with nearly 70 percent of the ecommerce giant’s clientele using a mobile device to shop. On Cyber Monday, the first major online shopping day of the season, customers worldwide ordered more than 33 electronics items per second from a mobile device.

The number of members of Amazon Prime, the online retailer’s paid-for service, who shopped via mobile more than doubled in the U.S. this season, Amazon said.

U.S. Jewelry & Watch Sales +3%

U.S. jewelry and watch sales from all retail outlets increased 3.3% year on year to an estimated $6.9 billion in November 2015, according to provisional figures from the Bureau of Economic Analysis.

Jewelry sales in November increased 3.3 per cent year on year to $6.1 billion, according to Rapaport News estimates – beating the October growth rate of 1.9%.

Watch sales rose 3.8% to $811 million year on year. Both categories have seen seven consecutive months of growth after five straight months of decline between December 2014 and April 2015.

Millennials Still Desire Diamonds

Millennials are almost twice as likely as non-millennials to have bought diamond jewelry as a holiday gift, according to a survey carried out by the Diamond Producers Association (DPA).

More than a quarter of men gave diamond jewelry to their partner last holiday season, while this year one third said they planned to, according to the DPA, which polled 400 consumers with annual household income of $75,000 or more in an online survey immediately after the Thanksgiving weekend. The respondents were all married or in a committed relationship, aged 18 to 64, and included a “robust sample” of millennials.

Tiffany Tops Survey of 66 U.S. Digital Brands

Tiffany & Co. topped a ranking of jewelry and watch brands’ digital performance carried out by business intelligence company L2.

The retailer was one of only two brands to receive a “genius” ranking in the 2015 Digital IQ Index: Watches & Jewelry, which benchmarks the online strength of 66 brands in the U.S. The other “genius” brand as per the L2 index was Cartier.

MINING 	  

Warm Weather Poses Risk to Canada Ice Road

The worlds busiest ice road in Canada’s Northwest Territories is running late because unseasonably warm weather has set back ice formation on a path that gives access to remote diamond mines during the winter, Reuters reported December 24.

The road is still expected to open on schedule late January. However, if current weather patterns continue, there could either be more work for crews trying to build the ice, or the road’s already short period of operation could be cut, the report said.

Paragon Shares Delisted from AIM

Paragon Diamonds was delisted from London’s Alternative Investment Market (AIM) December 29, according to a London Stock Exchange statement of the same date.

The miner had released a statement December 24 saying its shares would be delisted as negotiations over the funding for its mining operations in Lesotho were “unlikely” to reach a “conclusion” by year-end.

The company’s directors worked “tirelessly” to secure financing to bring its Lemphane Kimberlite Pipe Project into production and to enable the miner to explore the Mothae Kimberlite Resource, according to the December 24 statement.

GENERAL 	  

Elvis’ Jewelry Up for Auction

Jewelry and watches owned by Elvis Presley will be among items auctioned at the American singer and actor’s Graceland home in Memphis, Tennessee, this coming week.

“The Auction at Graceland” on January 7 will offer, among a number of pieces, a gold, diamond and rock crystal quartz ring gifted by Elvis to his friend Linda Thompson, estimated at $15,000 to $20,000. Also up for bids is a 14-karat gold necklace gifted to bodyguard Sam Thompson featuring the initials “TCB,” estimated at $12,000 to $15,000, according to Graceland Auctions.

India’s IBJA Plans World Silver Council

The India Bullion and Jewelers Association (IBJA) plans to launch the World Silver Council in the first week of January, Business Standard reported.

The apex body will include representatives from domestic and global silver miners, refiners, traders and users, the report said December 15, citing a senior IBJA official. It will also seek membership from domestic and global players in the silver market and plans to seek ‘council’ status from the Indian government. No such ‘council’ currently exists for the silver industry in India, the newspaper said.

ECONWATCH 	  

Diamond Industry Stock Report

U.S. retail stocks were generally stable or slightly down this past week since Christmas. Kohls (+2.1%) headed the pack, while Birks Group (-10%) fell the most. Far East stocks were mixed, with Hong Kong’s Chow Tai Fook (+2.2%) and Luk Fook (+1.9%) gaining and Singapore-listed ValueMax Group (-3.3%) heading the declines. Mining stocks were solid overall, but Anglo American (-9%) continued its recent slide. Indian share prices were mixed, with Lypsa Gems (+11%) heading the gains and Goldiam International (-5%) suffering the biggest decline.

View the detailed industry stock report.
Dec. 31 (09:30 GMT) Dec. 24 (10:00 GMT) Chng.
$1 = Euro 0.92 0.91 0.003
$1 = Rupee 66.22 66.07 0.2
$1 = Israel Shekel 3.90 3.90 0.01
$1 = Rand 15.60 15.23 0.37
$1 = Canadian Dollar 1.39 1.39 0.00

Precious Metals Chng.
Gold $1,062.48 $1,073.90 -$11.42 -1.1%
Platinum $871.55 $875.75 -$4.20 -0.5%
Silver $13.88 $14.34 -$0.46 -3.2%

Stock Indexes Chng.
BSE 26,130.97 25,842.44 288.53 1.1%
Dow Jones 17,603.87 17,602.61 1.26 0.0%
FTSE 6,256.14 6,249.53 6.61 0.1%
Hang Seng 21,914.40 22,138.13 -223.73 -1.0%
S&P 500 2,063.36 2,064.29 -0.93 0.0%
Yahoo! Jewelry 1,005.71 1,007.05 -1.34 -0.1%

Rapaport Weekly Market Comment January 7, 2016

Polished prices firm, market mood much better and rough demand improving due to polished shortages. Manufacturing still at about 30% below capacity. We advise caution as current market prices are based on shortages created by artificial rough prices that are higher than resultant polished. Rough market volatility expected in 1H as miners reduce prices to increase revenue. Chinese New Year (Feb.😎 demand uncertain with Chinese economy under pressure as Shanghai stock market plummets 12% since Jan. 1 and yuan currency devalued 2%. U.S. steady after relatively positive holiday season. Signet Jewelers reports Nov-Dec. sales +5% to $1.9B. Notice: Rapaport Diamond Specifications updated as of 1/1/16. See www.diamonds.net/Prices/RapaportSpecs.aspx.

RapNet Data: January 6

Diamonds 1,057,289
Value $7,705,681,371
Carats 1,202,677
Average Discount -27.91%

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
January 7-11 Thu-Mon

Rapaport Rough Tender

Surat, India

View Details
January 12-20 Tue-Wed
Rapaport Melee Auction

New York & Dubai

View Details
January 13-20 Wed-Wed

Rapaport Single Stone Auction 

New York & Israel

View Details

RapNet is Fully Mobile 

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QUOTE OF THE WEEK
The implementation of store-operations initiatives in the third quarter combined with investment in our recently launched innovative merchandising and marketing programs positioned Signet well for a strong fourth quarter and beyond.

Signet Jewelers chief executive officer Mark Light on the retailer’s 5% year-on-year increase in holiday sales

MARKETS 	  

United States: Dealers return from New Year vacation optimistic about 2016 but profitability challenges remain. Shortage of RapSpec A2 (3X, none) diamonds on the market. Good demand for 0.30-0.80ct., G-J, SI-I2 diamonds...

Belgium: Better mood in Antwerp than before Christmas-New Year although trading is still cautious. Prices supported by shortages with dealers competing for RapSpec A2 (3X, none) diamonds...

Hong Kong: Trading improving as jewelers prepare for the Chinese New Year (Feb.😎. Shortages in GIA-dossiers supporting prices with good demand for RapSpec A2 (3X, none) 0.30-0.50ct., D-J, VVS1-SI diamonds. Large stone market cautious...

India: Trading improving. Sellers holding the right goods are able to get good prices. Shortages of RapSpec A2 (3X, none) diamonds. Good demand and shortages for 0.30-0.50ct., D-J, VS-SI diamonds...

Israel: Market stable with much better mood than two months ago. Dealers feel the market has bottomed and there is positive momentum. Prices supported by shortages and U.S. demand...

Click here to continue reading

INDUSTRY 	  

Polished Diamond Prices Increase in December

Polished diamond market sentiment improved in December as shortages supported prices and dealers filled last-minute holiday orders.

The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rose 1.5% in December. RAPI for 0.30-carat diamonds advanced 4.7% and RAPI for 0.50-carat diamonds grew 3%. RAPI for 3-carat diamonds fell 0.1%.

For the full year 2015, RAPI for 1-carat diamonds declined 5.8%. RAPI for 0.30-carat diamonds dropped 13.4%, while RAPI for 0.50-carat diamonds slumped 14.5%. RAPI for 3-carat diamonds fell 14.5% in 2015.

Industry Stocks Lag in 2015

Global diamond, jewelry and retail stocks underperformed this year as 76% of the listed companies tracked by the Rapaport Diamond Industry Stock Tracker declined in 2015.

Out of 50 stocks followed by Rapaport News, 38 fell between January 2 and December 29, according to data compiled from Yahoo Finance.

The worst-hit region was the Far East, where all five tracked companies saw their share prices fall. U.S. retail stocks also took heavy hits, while seven out of 10 miners outside of the U.K. markets tracked by Rapaport News lost at least 13 percent and all U.K. miners but one declined. Continental European and Indian stocks were mixed.

World’s Largest Blue Star Sapphire Found

The world’s largest blue star sapphire was discovered in Sri Lanka, the BBC reported January 4, citing gemologists in the country. The 1,404.49-carat gem is estimated to be worth at least $100 million and could sell for up to $175 million, the report said.

The precious stone, mined at the City of Gems — Ratnapura — in southern Sri Lanka, has been certified by the Gemmological Institute of Colombo, the nation’s capital.

Angola Production Static at 9M Cts.

Angola produced an estimated 8.8 million carats of diamonds in 2015, AllAfrica.com reported December 30, citing the nation’s Minister of Geology and Mining Francisco Manuel de Queiroz. The growth in output last year was flat when compared with the previous year’s production as disclosed by the Kimberley Process August 12.

Revenue from diamond sales was $1.1 billion, according to the report, representing a 17 percent year-on-year drop. The average price per carat declined 17 percent to $125, based on a comparison with Kimberley Process data from 2014.

World Gold Council Consults on Shariah Standard

The World Gold Council (WGC) has joined up with Amanie Advisors, an advisory firm for Islamic markets, to explore the possibility of creating a global Shariah standard on gold.

The standard aims to give guidance on how to use gold in Islamic financial products and transactions, a WGC statement said. Having an accepted standard available would also help develop a wider range of Shariah-compliant gold products, provide greater clarity for Islamic finance investors and make Shariah-compliant instruments more widespread and diverse, the council added.

RETAIL & WHOLESALE 	  

Signet’s Holiday Sales +5%

Signet Jewelers reported holiday-season group sales rose 5 percent year-on-year to $1.95 billion in 2015, driven by success across strategic store brands, merchandise categories and selling channels. A stronger result helped the company to improve its revenue guidance for the fourth quarter.

Same-store sales climbed 4.9 percent during the eight weeks that ended December 26, compared with a 3.6 percent advance a year earlier. Growth was mostly driven by mall-based and outlet concept stores in the U.S. and Ernest Jones stores in the U.K., according to a statement by the New York and London-listed retailer January 7. At a constant exchange rate, total sales increased 6.3 percent.

E-commerce sales jumped 11 percent to $139.7 million.

Huawei, Swarovski Launch ‘Female-Focused’ Smartwatches

Huawei Consumer Business Group has teamed up with the Swarovski Gemstones Business to unveil two new versions of a premium smartwatch the Chinese telecom company launched last year.

The release at the Consumer Electronics Show in Las Vegas marks a “new female focus for the company,” Huawei said.

The Jewel and Elegant editions – available from March 2016 – complement the Classic, Active and Elite smartwatches Huawei released in 2015 and offer “stylish” options aimed at women.

LVMH, Arnault, Catterton Create Private Equity Firm

Luxury giant LVMH Moët Hennessy Louis Vuitton has partnered with private equity group Catterton and French business magnate Bernard Arnault to set up what the trio claims will be the world’s largest consumer-focused investment firm.

As part of the deal, Catterton’s private equity operations in North America and Latin America will combine with LVMH and Groupe Arnault’s European and Asian private-equity and real-estate business. It is targeting $12 billion in assets under management after successor funds are closed.

Sotheby’s 2015 Jewelry Auction Sales Hit $562M

Sotheby’s sold $561.7 million of jewelry at 11 auctions in 2015, undershooting a revenue record of $602.5 million in the previous year. The results cannot be compared with previous periods because they are “not aggregated with the same exact information,” the auctioneer cautioned.

The company sold $300.5 million of jewelry across two auctions in Geneva, including a November auction where it sold the high-profile Blue Moon diamondfor $48.5 million. Three New York auctions brought in $135.7 million, and the company sold $105.4 million of jewels at three events in Hong Kong. London sales totaled $20.1 million (GBP 13.2 million) from three auctions.

MINING 	  

Union to Protest De Beers’ Kimberley Sale

South Africa’s National Union of Mineworkers (NUM) will march in Johannesburg next week against De Beers decision to sell the Kimberley Mines, claiming the union was not consulted before the deal was announced in the media last year.

Protesters affiliated to the NUM’s Kimberley Mines branch will be “voicing their anger, disappointment and sadness” over the manner in which De Beers sold the mines in South Africa to Petra Diamonds and Ekapa Mining, leaving “600 employees’ future hanging in limbo.” The union will demand the mining giant halt the sale and start a consultation process.

Dominion Investors Call for Share Buyback

Two Dominion Diamond Corp. shareholders have urged the Canadian-listed miner to use cash for a share buyback, Reuters reported, citing the unidentified investors who asked not to be named.

The shareholders, who own nearly 3 percent of Dominion, could use some of its nearly $300 million in net cash to buy back stock, the report said December 30. The cash pile is equal to about 35 percent of the company’s market value. Dominion’s share price fell 33 percent in 2015 to December 29.

GENERAL 	  

Kate’s Engagement-Ring Replica No Longer For Sale

Copies of Kate Middleton’s sapphire and diamond engagement ring have been removed from a collection of replica royal jewelry going on sale to the public, the U.K.’s Daily Mail reported.

Middleton, the Duchess of Cambridge and wife of Prince William who is second in line to the throne in Britain, may have herself banned the sale because the real ring has a deep personal significance for the couple, the newspaper said, citing royal sources.

The original ring once belonged to William’s late mother Princess Diana. Its replica was expected to be part of a ‘Princess Diana jewelry collection’ sold online and at a royal gift shop at William and Kate’s official residence, Kensington Palace.

Fair-Trade Activist Valerio Honored by Queen

Fair-trade activist and jeweler Greg Valerio was included in the Queen’s New Year Honours List for 2016, which recognizes achievements and service of “extraordinary” people across the U.K.

Valerio was made a Member of the Most Excellent Order of the British Empire (MBE) for services to the UK and fair-trade gold sectors in Colombia and East Africa, according to an official list of recipients.

The maverick and social entrepreneur owns VALERIO Jewellery, an online ethical and fair-trade fine jewelry brand.

19 Ordered to Face Trial over Brussels Heist

Nineteen people have been ordered to face trial over a $50 million diamond heist at Brussels Airport in 2013, AFP reported, citing Belgian news agency Belga.

Nine suspects have been charged with direct involvement in the robbery and the others with hiding the diamonds. Six of the 19 are also charged with money laundering in Belgium, Switzerland and Morocco, and three are women, the report said December 31.

The robbery in February 2013 saw a gang of armed men pose as police and take the diamonds from a passenger plane.

ECONWATCH 	  

Diamond Industry Stock Report

After a difficult 2015, industry stocks were mixed in the first week of the New Year, some prices recovering and others suffering from a global slide led by China. Several U.S.-listed retailers rose by 2% to 5%, led by Signet (+4.5%), but Birks Group (-17%) and Sotheby’s (-11%) headed the declines. True North Gems (+6%) was the strongest of the mining stocks, with some miners improving, but others including Anglo American (-19%) slipped. Most Far East and European stocks fell, led by Singapore-listed ValueMax Group (-12%) and Switzerland-listed Swatch Group (-10%).

View the detailed industry stock report.
Jan. 7 (10:40 GMT) Dec. 31 (09:30 GMT) Chng.
$1 = Euro 1.09 0.92 0.170
$1 = Rupee 66.87 66.22 0.7
$1 = Israel Shekel 3.94 3.90 0.04
$1 = Rand 16.06 15.60 0.46
$1 = Canadian Dollar 1.41 1.39 0.02

Precious Metals Chng.
Gold $1,096.60 $1,062.48 $34.12 3.2%
Platinum $868.45 $871.55 -$3.10 -0.4%
Silver $13.99 $13.88 $0.11 0.8%

Stock Indexes Chng.
BSE 24,851.83 26,130.97 -1,279.14 -4.9%
Dow Jones 16,906.51 17,603.87 -697.36 -4.0%
FTSE 5,903.77 6,256.14 -352.37 -5.6%
Hang Seng 20,333.34 21,914.40 -1,581.06 -7.2%
S&P 500 1,990.26 2,063.36 -73.10 -3.5%
Yahoo! Jewelry 974.15 1,005.71 -31.56 -3.1%

Rapaport Weekly Market Comment January 14, 2016

Sentiment improving after positive U.S. Christmas season but low expectations for Chinese New Year. Polished prices firm with supply shortages expected to support the market through 1Q. Manufacturing increasing slightly but still estimated at 30% below capacity. Rough demand improving with 5-7% price cut expected at next week’s De Beers sight. Chow Tai Fook 3Q sales -11%. Luk Fook 3Q same-store sales -25%. Richemont 3Q jewelry maisons sales +2% to $1.8B. Birks 3Q same-store sales +3.5%. Michael Hill 1H revenue +9% to $213M. U.S. Nov. polished imports -15% to $1.6B, polished exports -16% to $1.4B. Israel 2015 polished exports -20% to $5B, rough imports -31% to $2.8B.

RapNet Data: January 13

Diamonds 1,061,512
Value $7,911,405,249
Carats 1,196,450
Average Discount -27.74%

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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
Improved living and income standards are likely to be the focus of the [Chinese] government in the coming years as will be increased domestic consumption. So luxury brands can still expect an increase in the number of individuals purchasing luxury items in China, but on average at lower prices.

Ken Grant, director at FDKG Insight and publisher of Luxury Insights China for 4Q 2015

MARKETS 	  

United States: Sentiment improving with positive reports about jewelry sales over Christmas. Dealers returning to the market and looking for diamonds but trading limited by shortages...

Belgium: Dealers more optimistic about the market after solid U.S. Christmas season. Buyers making inquiries to assess prices rather than place orders...

Hong Kong: Trading is focused on filling last-minute orders before the wholesale market closes for the Chinese New Year (Feb.😎...

India: Polished trading okay with steady U.S. post-holiday demand but some uncertainty about China...

Israel: Sentiment improving and dealers gaining confidence to buy. Polished prices firm with shortages limiting trading for RapSpec A2 (3X, none) diamonds...

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INSIGHTS 	  

Adjusting to China’s New Normal

The diamond industry has a lot riding on the Chinese New Year season and recent events in Shanghai have done little to inspire confidence. As stocks plummeted and the Renminbi depreciated against the dollar, fresh concerns rose about China’s growth prospects, its impact on the global economy and on the diamond and jewelry trade...

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INDUSTRY 	  

U.S. Polished Imports -15% in Nov.

U.S. polished diamond imports fell 15 percent year on year to $1.62 billion in November. Diamond imports by weight declined 14 percent to 735,561 carats and the average price dipped 0.6 percent to $2,205 per carat. Polished diamond exports, meanwhile, fell 16 percent to $1.37 billion, driving net imports down 9.3 percent to $253 million.

Rough diamond imports soared 37 percent to $31.8 million, while rough exports more than doubled to $18 million, leaving net rough imports down 9.4 percent to $13.8 million. The net diamond account, reflecting the difference between net imports and exports, decreased 9.3 percent to $266.8 million.

Element Six Takes Legal Action Against Synthetics Firm

Element Six, De Beers synthetics business, began legal action January 12 in Singapore against IIa Technologies, alleging an infringement of patents.

Some patents for proprietary synthetic diamond products and their manufacturing method have been infringed, in particular Singapore patent numbers 115872 and 110508, Element Six claimed in a statement. The Singapore-based grower of colorless type-IIa gems is “exploiting Element Six patents for commercial gain,” potentially in both the industrial and jewelry sectors, the statement alleged.

Israel’s 2015 Polished Exports -20%

Israel’s polished diamond exports slumped 20 percent to $5 billion in 2015 because of a drop in demand in key markets and a mismatch between the prices of polished and rough gems, according to the Ministry of Economy.

Polished imports declined 23 percent to $3.48 billion. Net polished exports, representing exports minus imports, fell 13 percent to $1.52 billion. Rough imports for the year slumped 31 percent to $2.78 billion and rough exports fell 28 percent to $2.2 billion. Consequently, net rough imports, representing imports minus exports, slid 39 percent to $585 million. Israel’s net diamond account, the difference between net imports of rough and net exports of polished, jumped 18 percent to $931 million.

IDE Hires Eli Avidar as Managing Director

The Israel Diamond Exchange (IDE) has appointed Eli Avidar as managing director, replacing Moti Besser, who had completed two terms in the role.

Avidar, managing director of the Israel Diamond Institute Group of Companies (IDI) since January 2007, takes on the new position with immediate effect, according to an IDE statement January 13.

Avidar’s appointment comes after Yoram Dvash was elected president of the IDE in December. Soon after taking office he appointed a new board and committee heads and set up an advisory panel of former presidents.

Temple St. Clair, Cartier Win GEM Awards

Temple St. Clair won the Jewelers of America (JA) GEM Award for Jewelry Design at this year’s ceremony in New York, which was held January 8.Her design achievements in 2015 included the launch of her ‘Wings of Desire’ and the debut of her collection ‘Mythical Creatures from the Golden Menagerie’ at the Musée du Louvre in Paris.

Cartier received the GEM Award for Watch Design. The GEM Award for Media Excellence went to Rob Bates, news director of JCK. Joe Thompson, editor-in-chief of WatchTime magazine, was the recipient of the 2016 GEM Award for Lifetime Achievement.

Diamond-Backed Cryptocurrency to Launch

The companies behind the world’s first diamond-backed cryptocurrency will start selling the digital coinage this month. The asset class used is colored diamonds, which the founders of the PinkCoin claim have not lost value since tracking began in 1959.

Precious Investments and its subsidiary BitGem Asset Management (BAM) will launch the PinkCoin crowdsale – a crowdfunding process in which investors acquire PinkCoin tokens – on January 18.

PinkCoin is based on the Ethereum cryptocurrency platform and backed by a pool of fixed colored-diamond assets kept in trust by BAM. The initial crowdsale will comprise 5 million PinkCoin tokens and the initial diamond asset pool has been valued at $5 million, meaning each token will be worth $1 to begin with. The diamond pool will be valued on a regular basis.

JVC Publishes Quality-Assurance Guide

The Jewelers Vigilance Committee (JVC) has published a guide that helps jewelers ensure the products they sell comply with the law.

“Getting It Right – JVC’s Guide to Quality Programs for Jewelers,” published with a grant from the International Gemological Institute, provides “simple and useable” tools to implement quality-assurance programs. The guide aims to increases awareness of elements that jewelers should address to assure they are following the required standards.

AGS to Run Advert Campaign

The American Gem Society (AGS) announced plans to launch a campaign in the U.S. to raise customer awareness about its brand and members and attract younger customers.

“Buy It with Confidence” advertisements will target men and “Love What You See. And What You Can’t” will be aimed at women. Print advertisements will run in lifestyle magazines GQ, Glamour and Vogue in the first half of 2016 in key regional markets to cover Valentine’s Day, Mother’s Day and the bridal season. A print and digital-media advertisement campaign will run in a wedding magazine,The Knot, throughout 2016.

RETAIL & WHOLESALE 	  

Luk Fook’s 3Q Same-Store Sales -25%

Luk Fook reported group same-store sales from self-operated shops dived 25 percent year on year in the third quarter that ended December 31 as retail sentiment remained “sluggish.”

Revenue growth in Hong Kong and Macau slumped 26 percent year on year, while mainland-China sales dropped 10 percent. The dip was from a “relatively higher base” last year.

Sales of gem-set jewelry fell 26 percent and gold dropped 25 percent.

Chow Tai Fook 3Q Sales -11%

Chow Tai Fook reported group retail sales dropped 11 percent year on year in the third quarter that ended December 31 as fewer tourists from mainland China visited Hong Kong and on account of weaker local retail sentiment in Hong Kong and Macau.

Same-store sales at the Hong Kong-listed group dived 15 percent in value terms and slid 13 percent on a volume basis. Hong Kong and Macau retail sales suffered the steepest decline, falling 20 percent in total value. Same-store sales in the region plummeted 23 percent by value and 21 percent by volume.

Richemont’s 3Q Sales -4%

Richemont reported revenue – measured at constant exchange rates – declined 4 percent year on year in the third quarter that ended December 31 even as jewelry sales grew in most regions and product categories. Demand for watches was weak.

The slowdown reflected weaker trading in Europe than in the previous six months and continued challenging conditions in the Asia-Pacific region.

Total sales at actual rates during the three months increased 3 percent to $3.19 billion (EUR 2.93 billion), the Switzerland-based luxury group said in a statement January 14.

Michael Hill’s Sales +9%; Mulls ASX Listing

Michael Hill reported sales increased 8.7 percent year on year in the first half that ended December 31.

Revenue grew to $213 million (AUD 306.3 million), while same-store sales advanced 4.8 percent to $201.5 million. The group opened six new Michael Hill stores during the half year, giving a total of 293 at the end of December.

The results come as the jewelry retailer announced it is considering listing shares on the Australian Securities Exchange (ASX) as the company – founded in New Zealand – has over time moved its center of gravity to Australia.

Birks Group’s 3Q Comparable Sales Rise

Jewelry retailer Birks Group reported comparable-store sales rose 3.5 percent year on year in the third quarter, defying difficult market conditions. Total consolidated net sales – down 6.6 percent on a weaker Canadian dollar – also rose 1.2 percent on an ex-currency basis.

Comparable-store sales in Canada advanced 5.9 percent and in the U.S. grew 1.4 percent even though a stronger U.S. dollar constrained tourist spending stateside.

Pandora’s Sales +40% in 2015

Pandora reported preliminary revenue surged 40 percent to $2.44 billion (DKK 16.7 billion) over the year to December 31, in line with its guidance released in November.

A “tailwind” from foreign-exchange rates of about 11 percent was one percentage point higher than the previous estimate, the Denmark-headquartered company said. The company had forecast sales of above $2.34 billion in 2015.

Holiday-Season Mobile Sales +59%

Mobile commerce in the U.S. soared 59 percent year on year to $12.65 billion in November and December, according to the latest holiday-season estimates from comScore.

The preliminary figure – sales from smartphones and tablets – accounts for 18 percent of total digital commerce compared with 13 percent last year, according to a statement January 8. The company had earlier forecast a 50- to 60-percent surge in mobile commerce revenues during the same period.

Total digital spend is projected to have risen 13 percent to $69.08 billion, while final data showed online sales from desktop computers increased 6 percent to $56.43 billion.

MINING 	  

Dominion Adds Director from Activist Shareholder Group

Dominion Diamond Corporation added two new directors on its board, including one from an institutional investor that had put pressure on the Canada-based miner’s management after a share-price slump in 2015.

Josef Vejvoda, a portfolio manager at K2 & Associates Investment Management, was appointed after being “identified and proposed to Dominion by a group of shareholders,” according to a Dominion statement January 13. A shareholder group led by K2 “entered into an agreement with Dominion which includes a customary standstill on the part of the group,” the statement added.

Jim Gowans, a former De Beers executive, has also joined the board and will be appointed non-executive chairman by April 30.

Rockwell to Close Johannesburg HQ

Rockwell Diamonds will close its head office in Johannesburg and stop operations at its Saxendrift mine as part of a strategic review to cut costs and improve cash flow. The company has also issued all of its employees with retrenchment notices amid a slump in processing, production and sales figures.

The miner will transfer Johannesburg-based key senior executives to its operations in the country’s Middle Orange River (MOR) region on a full-time basis, saving about $484,097 (ZAR 7.9 million) per year.

Peregrine Unveils Chidliak-Sample Results

Peregrine Diamonds reported an overall diamond grade of 0.88 carats per tonne from an 814-dry tonne bulk sample from the Chidliak Diamond Project in Nunavut, Canada. The material was taken from the CH-7 kimberlite pipe at the mine, which it owns outright.

The Toronto-listed exploration company recovered 717.65 carats of commercial-size diamonds, including “53 diamonds one carat or larger and 183 diamonds over 0.50 carat in size.” The largest individual gem was a 5.33-carat white octahedron with no inclusions.

Diamond breakage was high, with 75 to 90 percent of gems damaged, more than double what is typical for large-diameter reverse-circulation (RC) drilling programs.

GENERAL

4th India Diamond Week to Begin in New York

The fourth edition of India Diamond Week will be held in New York from January 18 to 21.

The event, run by India’s Gem & Jewellery Export Promotion Council (GJEPC) and New York’s Diamond Dealers Club (DDC), will host about 15 diamond companies from India at the DDC’s premises. Diamond wholesalers and dealers who are members of the DDC and trade diamonds in New York, as well as buyers from Chicago, Los Angeles, Canada and Florida, are expected to attend the event.

ECONWATCH 	  

Diamond Industry Stock Report

U.S. stocks were mixed as retailers reported holiday sales, led by Birks Group (+11%). Far-East stocks reflected market turmoil in the region, with Luk Fook (-13.5%) slipping the most on disappointing 3Q sales. Goenka Diamond (+18%) led mixed Indian stocks, while most miners across global markets suffered.

View the detailed industry stock report.
Jan. 14 (11:45 GMT) Jan. 7 (10:40 GMT) Chng.
$1 = Euro 0.91 1.09 -0.171
$1 = Rupee 67.49 66.87 0.6
$1 = Israel Shekel 3.94 3.94 0.00
$1 = Rand 16.62 16.06 0.56
$1 = Canadian Dollar 1.44 1.41 0.02

Precious Metals Chng.
Gold $1,092.25 $1,096.60 -$4.35 -0.4%
Platinum $844.88 $868.45 -$23.57 -2.7%
Silver $14.09 $13.99 $0.10 0.7%

Stock Indexes Chng.
BSE 24,772.97 24,851.83 -78.86 -0.3%
Dow Jones 16,151.41 16,906.51 -755.10 -4.5%
FTSE 5,842.17 5,903.77 -61.60 -1.0%
Hang Seng 19,817.41 20,333.34 -515.93 -2.5%
S&P 500 1,890.28 1,990.26 -99.98 -5.0%
Yahoo! Jewelry 981.65 974.15 7.50 0.8%

Rapaport Weekly Market Comment January 21, 2016

Polished prices firm due to shortages. Rough demand improving as manufacturers try to fill gaps in supply amid unconfirmed reports that De Beers has cut prices 5-7% at Jan. sight. Demand is cautious due to weak global economy and plunging stock markets: Dow -10% (Jan. 1-20), oil slumps below $30. Low expectations for Lunar New Year as China’s 2015 GDP growth slows to 6.9%. Christmas retail season softer than first reported as Tiffany Nov.-Dec. sales -6% to $961M. India Dec. polished exports -17% to $1.2B, rough imports +2% to $1.5B. Rio Tinto 4Q production +50% to 4.3M cts., Simon Trott replaces Jean-Marc Lieberherr as diamond chief.

RapNet Data: January 20

Diamonds 1,065,756
Value $7,943,642,792
Carats 1,222,034
Average Discount -27.82%

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
After such a difficult year, it seems that there are some reasons to be cautiously optimistic as 2016 begins, and we may be starting to recover some of the lost momentum.

De Beers CEO Philippe Mellier in a speech at the sight in Gaborone this week

MARKETS 	  

United States: Mood improving and dealers are looking for select goods. Liquidity is tight. Suppliers giving higher discounts for cash deals, while buyers are insisting on credit terms...

Belgium: Dealers gaining in confidence as polished prices firm. Shortages supporting prices with no substantial rise in demand ahead of Chinese New Year. U.S. demand stable...

Hong Kong: Dealers filling last-minute orders before the market shuts down for the Chinese New Year Spring Festival (Feb.😎...

India: Greater optimism about the market as prices firm due to shortages. Trading improved since Diwali. Suppliers still concerned about China as Chinese New Year demand is very soft...

Israel: Rising dealer confidence. Polished prices firming due to limited availability of fine-cut goods and some U.S. post-holiday and Chinese New Year demand...

Click here to continue reading

INDUSTRY 	  

Rapaport Releases Annual Price Statistics Report 2015

The Rapaport Group released its annual Diamond Price Statistics Report for 2015, evaluating the performance of polished diamond prices. The report provides an in-depth analysis of the trends in polished diamond prices during the past year and it compares the price changes of specific diamond categories.

The Rapaport Diamond Price Statistics Report charts the progression of polished diamond prices and indexes in various sizes throughout the year and across a period of up to 37 years. In doing so, the report provides a complete study of the history and current standing of the global diamond market.

To purchase the report, please visit: http://store.rapaport.com/

India’s Polished Exports -17% in December

India’s polished diamond exports slumped 17% year on year to $1.2 billion in December, according to provisional data from the Gem & Jewellery Export Promotion Council. By volume, polished exports dropped 5% to 1.9 million carats. Polished imports plummeted 46% to $239 million, leaving net exports 4.6% lower at $964.3 million.

Rough diamond imports increased 2.4% to $1.47 billion and rough exports fell 7.3% to $99.6 million, leaving net imports 3.2% higher at $1.37 billion. India’s net diamond account, which is calculated as the difference between net polished exports and net rough imports, was negative $402.2 million, compared with negative $313.4 million in December 2014.

Leo Schachter Hires Sales VP

Polished diamond manufacturer Leo Schachter Diamonds has appointed Frederick Goldman’s senior vice president Joseph Green as its new executive VP of sales.

In his new role, Green is responsible for the development of the De Beers sightholder’s business supplying diamonds to independent retailers.

Green was senior vice-president at jewelry maker Frederick Goldman for eight years. He was also a VP at Ritani, a jewelry designer and manufacturer.

Borsa Istanbul, WDM Sign Pact

Turkish exchange Borsa Istanbul signed an agreement with the World Diamond Mark Foundation (WDM) to “institutionalize” diamond trading in Turkey and other markets with which the bourse is connected.

The deal “cements the cooperation” between the diversified Istanbul bourse and the WDM, the WDM said.

RETAIL & WHOLESALE 	  

Tiffany’s Holiday Sales -6%

Tiffany & Co. reported global sales in the two months to December 31 dropped 6% year on year to $961 million as a stronger U.S. dollar coupled with weaker tourist spending hit revenue. The jeweler cut its guidance for full-year net earnings.

Even at constant exchange rate, worldwide sales fell 3% during the 2015 holiday season as declines in the Americas and Asia Pacific offset growth in Japan and Europe. Comparable-store sales worldwide slid 5% ex-currency.

In the U.S., lower foreign-tourist spending in New York and certain other markets in the country exacerbated the sales drop. Total sales slumped 7% year on year to $505 million. Ex-currency, the dip was 5% and comparable-store sales fell 8%.

U.S. Jewelry Store Sales Rise in November

U.S. specialty jewelry store sales rose 3.6% year on year to $2.6 billion in November, according to provisional figures from the U.S. Census Bureau. Sales in the first 11 months of 2015 fell 1% year on year to $24.69 billion.

Total retail and food services sales in the U.S. increased 1.6% to $448.58 billion in November, adjusted for seasonal fluctuations.

U.S. Holiday Sales +3%

U.S. holiday sales rose 3% year on year to $626.1 billion despite unforeseen weather conditions and an “extreme deflationary retail environment,” according to the National Retail Federation (NRF). This total growth in retail revenue, which includes online sales, lags the NRF’s 3.7-percent increase forecast for the season.

Non-store holiday sales grew 9% to $105 billion. Retail sales in December – excluding automobiles, gas stations and restaurants – increased 3.1% on an unadjusted basis.

U.S. Jewelry Prices Fall in December

The U.S. consumer price index (CPI) for jewelry fell 0.4% in December from a month ago, according to the Bureau of Labor Statistics. The inflation reading was 1% lower from a year earlier.

The December CPI for watches slipped 1.6% from a month ago and rose 0.8% from a year earlier, according to the U.S. labor data. The CPI for all urban consumers declined 0.1% in December on a seasonally adjusted basis.

MINING 	  

Rio Tinto’s 4Q Production +50%

Rio Tinto reported diamond production surged 50% year on year to 4.3 million carats in the fourth quarter that ended December 31.

The Argyle pit in the remote East Kimberley region of Western Australia produced 3.4 million carats in the three months, an 86-percent jump from a year ago. Production at the miner’s Diavik mine in Canada slipped 3% to 899,000 carats.

Rio Tinto’s full-year production for 2015 grew 25% to 17.4 million carats, below its guidance of 18 million carats issued on October 16. Total diamond production in 2016 is forecast at 21 million carats, a 21-percent increase on 2015.

Rockwell Diamonds’ 3Q Revenue -63%

Rockwell Diamonds reported revenue decreased 63% year on year to $4.9 million (CAD 7.1 million) in the third quarter that ended November 30 as diamond prices around the world dropped and a fatality at the Remhoogte plant in South Africa caused a two-week shutdown at the mine.

The loss for the quarter nearly doubled to $6.4 million compared with the same period last year. Rough diamond sales declined 60% to $4.8 million, while beneficiation income – revenue from a deal with polished-diamond manufacturer Diacore – slumped 89% to $106,606. The average price per carat sold increased 16% to $1,328.

Diavik Production -3% in 2015

Recovery levels from the Diavik Diamond Mine in Canada fell 3% year on year to 1.5 million carats in the fourth quarter that ended December 31, part-owner Dominion Diamond Corporation reported. A 9-percent drop in processing volumes to 0.46% contributed to the decline in extraction.

Full-year recovery in 2015 fell 9% to 6.4 million carats, which was below the planned 7 million carats, Dominion said. Results released by Dominion, which owns 40% of Diavik, are on a 100-percent basis. Rio Tinto controls the remaining interest in the mine.

The companies plan to produce 7 million carats at the mine in 2016, a 9% increase over the output in 2015. Together, they plan to mine 2.1 million tonnes and process the same amount this year, according to a preliminary plan.

Rio Tinto’s Diamond Head to Depart

Jean-Marc Lieberherr, the managing director of Rio Tinto’s diamonds business, is to leave the company as part of a restructuring of the miners diamonds and minerals product group.

Lieberherr, who has held the position for two and a half years, will be replaced by Simon Trott, Rio Tinto said. Lieberherr had been with the company for ten years. Trott is currently managing director of Rio Tinto’s salt and uranium businesses and will retain these responsibilities.

Lucapa’s Lulo Sales Hit Quarterly Record

Lucapa Diamond Company reported revenues of $5.6 million (AUD 8.1 million) from three sales of diamonds from the Lulo Diamond Project in Angola in the fourth quarter that ended December 31.

The figure was the highest quarterly sales result achieved by the miner to date, the company said. The average selling price was $1,468 per carat, the highest since mining commenced in January 2015.

GENERAL 	  

Rolex Exec. Elected JSA Chair

The board of the Jewelers’ Security Alliance (JSA) elected Rolex Watch U.S.A.’s chief executive officer Stewart Wicht as its chairperson for a three-year term.

Wicht’s election was announced at a JSA annual luncheon in New York on January 9. He replaces Adam Heyman, who also served three years.

WJA Chooses International Board

The Womens Jewelry Association (WJA) elected Brandee Dallow, director of Rio Tinto Diamonds’ North America representative office, as president of the WJA’s international board of directors. Jenny Luker of Platinum Guild International will take on the president-elect role. Dallow succeeds Andrea Hansen of LuxeIntelligence, who served for two years in the position.

Two men have been elected to the WJA board for the first time in the organization’s history: Craig Danforth of the Gemological Institute of America as international affairs co-chair and Benjamin Smithee of The Smithee Group, education chair.

Three Convictions in Hatton Garden Heist

Three members of a gang were convicted in connection with a $20 million (GBP 14 million) heist in London’s Hatton Garden diamond district, The Guardian reported January 14.

Carl Wood of Cheshunt, Hertfordshire; William Lincoln of Bethnal Green, east London; and Hugh Doyle, of Enfield, north London, were found guilty by a court in London January 14, the U.K. daily said.

A group of men drilled through a 50 centimeter-thick concrete wall to break into the Hatton Garden Safe Deposit vault over the Easter weekend in 2015, the report said. Some $12.8 million of the loot has not been recovered yet. A key gang member nicknamed “Basil,” captured on camera with a wig of red hair, is still at large.

ECONWATCH 	  

Diamond Industry Stock Report

Industry stocks suffered this past week as global markets tumbled. U.S. retail declines were led by Birks Group (-22%), while Tiffany fell 7.3% on disappointing holiday sales. Chow Sang Sang (-6.1%) headed the Far East drops. Mining stocks were mixed, with declines led by Rockwell (-16%) on poor 3Q results. Lypsa Gems (+27.5%) led the drops in India.

View the detailed industry stock report.
Jan. 21 (11:45 GMT) Jan. 14 (11:45 GMT) Chng.
$1 = Euro 0.92 0.91 0.002
$1 = Rupee 67.99 67.49 0.5
$1 = Israel Shekel 3.97 3.94 0.03
$1 = Rand 16.69 16.62 0.07
$1 = Canadian Dollar 1.45 1.44 0.01

Precious Metals Chng.
Gold $1,099.25 $1,092.25 $7.00 0.6%
Platinum $818.26 $844.88 -$26.62 -3.2%
Silver $14.03 $14.09 -$0.06 -0.4%

Stock Indexes Chng.
BSE 23,962.21 24,772.97 -810.76 -3.3%
Dow Jones 15,766.74 16,151.41 -384.67 -2.4%
FTSE 5,697.07 5,842.17 -145.10 -2.5%
Hang Seng 18,542.15 19,817.41 -1,275.26 -6.4%
S&P 500 1,859.33 1,890.28 -30.95 -1.6%
Yahoo! Jewelry 969.60 981.65 -12.05 -1.2%

Rapaport Weekly Market Comment January 28, 2016

Diamond manufacturers increasing production as profitability returns due to lower rough prices and firm polished prices due to shortages. De Beers 2016 first sight period rough sales +118% to $540 from $248M at Dec. sight period. Reduction in De Beers rough prices estimated at 7-10%. Polished demand cautious as China prepares for Lunar New Year (Feb.😎. Good demand for 1ct. RapSpec A2 (3X, none) with large 6-8% premiums for 3X over 3VG. De Beers 2015 production -12% to 28.7M cts., sales volume -40% to 20.6M cts. ALROSA 2015 production +6% to 38.3M cts., sales -30% to $3.4B and sales volume -25% to 30M cts. Petra 1H production +2% to 1.6M cts., sales -28% to $154M. Swiss watch 2015 exports -3% to $21.2B as Apple boasts record watch sales in holiday quarter.

RapNet Data: January 27

Diamonds 1,067,032
Value $7,937,845,462
Carats 1,226,337
Average Discount -27.96%

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 left prices unchanged because we see no reasons right now for them to fall, especially given they even rose slightly at the end of last year.

Andrey Zharkov, president of ALROSA, speaking to Interfax about keeping rough prices static at its January contract sale

MARKETS 	  

United States: Diamond manufacturers increasing production as profitability returns due to lower rough prices and firm polished prices due to shortages. De Beers 2016 first sight period rough sales +118% to $540 from $248M at Dec. sight period...

Belgium: Sentiment improving as more orders are coming in. U.S. demand sustaining the market. Steady sales to smaller markets such as Turkey and Scandinavia. Buyers face competition for select supply as availability is scarce...

Hong Kong: Wholesale trading improving with firm prices due to shortages. Jewelers are buying to replenish stock sold during the holiday season with some buying for inventory...

India: Mixed sentiment in Mumbai as rupee depreciation (-3% in Jan. to 68/$1) weighs on domestic demand. Dealers more active than before and suppliers getting better prices due to shortages...

Israel: Rising optimism as trading continues to improve. Steady U.S. orders compensating for weak Chinese demand. Wholesalers slowly increasing inventory levels as they expect prices to firm in the coming weeks due to continued shortages...

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RAPAPORT STATEMENT 	  

The Right Way Forward

De Beers is moving forward in the right direction by reducing rough prices sufficiently to enable increased sales of rough diamonds and a resumption of diamond manufacturing activity. This is evidenced by an increase in De Beers rough diamond sales by 118% from $248 million in the tenth sales cycle of 2015 to $540 million in the first cycle of 2016....

Click here to read the full statement

INDUSTRY 	  

De Beers January Revenue Jumps to $540M

De Beers sold $540 million worth of rough diamonds in January signaling a significant rise in demand from December. The company published the monthly sales results for the first time, adding that its December sales amounted to $248 million.

The revenue figure includes sales to sightholders, its auction clients and internal sales to De Beers government and local partners. The company explained that demand for rough broadened across the entire product range as cutting and polishing factories began to ramp up activity.

Sightholders said De Beers reduced prices by more than 5% on average. The company has reverted to its default deferral policy allowing sightholders to defer one box every six months after offering more flexibility in the second half of last year, but has kept a 20% buybacks policy introduced during that period.

De Beers 2015 Sales Volume -40%

De Beers rough diamond sales slumped 40% to 20.6 million carats in 2015 as market weakness and lower diamond manufacturing levels took their toll.

The decline in sales volume coincides with a 12% drop in production to 28.7 million carats over the previous year as the miner reduced rough output in response to trading conditions, parent Anglo American said. The result is just shy of production guidance of about 29 million carats.

The overall reduction is mainly due to reduced output from Debswana, De Beers partner in Botswana, where production dropped 16% to 20.4 million carats.

ALROSA Keeps Prices Stable

ALROSA kept prices steady at its January contract sale stressing it sees no reason for prices to fall in current market conditions.

“We left prices unchanged because we see no reasons right now for them to fall, especially given they even rose slightly at the end of last year,” Andrey Zharkov, president of the Russia-based miner, was quoted as saying by the Russian news service Interfax.

Demand for rough in January was better than expected while supply levels did not increase, sources close to ALROSA explained to Rapaport News. The miner once again allowed buyers to defer up to 70 percent of goods at the sale as it did at the previous sale in December. Clients said all goods were sold at the sale.

Six More Arrested in GIA Hacking Case

Six more people have been arrested in relation to the hacking of Gemological Institute of America (GIA) diamond-grading reports by outside parties as the investigation into the case continues. A total of eight arrests have now been made.

The GIA has extended its submission date for the confirmation service for members of the trade concerned about the validity of their grading reports by two months to March 31, 2016. Holders of a GIA report originally issued between November 2014 and October 2015 who are concerned about its validity may submit the original report and the referenced diamond to any GIA location at no charge by the new deadline. To date only 297 of 1,042 invalidated reports have been returned.

Swiss Watch Exports -4% in December

Swiss watch exports declined 3.8 percent year on year to $1.71 billion (CHF 1.74 billion) in December as shipments to Hong Kong, the nation’s largest trade partner for the industry, continued to fall.

Exports to Hong Kong slumped 21 percent to $244 million, while shipments to the U.S. fell 5.5 percent to $158.9 million, according to the Federation of the Swiss Watch Industry.

Wristwatch exports decreased 3.1 percent to $1.63 billion compared with a year ago, while shipments of other timepieces slumped 17 percent to $82.4 million.

Synthetics Firm Lures High-Profile Cutters

Diamond Foundry, a synthetic-diamond company with financial backing from actor Leonardo DiCaprio and Silicon Valley entrepreneurs from Princeton and M.I.T, has made two high-profile appointments, including the inventor of the princess cut.

Israel Itzkowitz, who invented the now-popular diamond style in 1979, has joined the company as Master Cutter. Over the years, he has crafted designs for De Beers, Tiffany & Co. and Graff Diamonds.

Maarten de Witte, a master diamond cutter and “brand builder,” formerly known as the ‘Diamond Wizard’ at Hearts On Fire, has also joined the company.

IIa Denies Infringement of Element Six Patents

Lab-grown diamond producer IIa Technologies denied it infringed on patents owned by De Beers synthetics company Element Six and vowed to “challenge the validity” of the patents.

“We believe we are not in any way infringing on Element Six’s claims,” Vishal Mehta, IIa’s chief executive officer, said in a statement. “In addition, we will challenge the validity of their patents. IIa Technologies has entered its appearance in the High Court in Singapore and will vigorously defend itself.”

IIa was “exploiting Element Six patents for commercial gain,” potentially in both the industrial and jewelry sectors, the De Beers subsidiary alleged earlier this month.

World Diamond Congress to Focus on Transparency

The World Federation of Diamond Bourses (WFDB) will hold its 37th World Diamond Congress in Dubai from May 16 to 19, placing transparency, responsibility and sustainability at the heart of the summit’s agenda.

The meeting, a biennial gathering of the WFDB and the International Diamond Manufacturers Association (IDMA), will be attended by the WFDB’s 30 presidents and more than 200 industry representatives. The WFDB also aims to use the forum to galvanize support for generic marketing of diamonds through its World Diamond Mark initiative and create stronger links with the Diamond Producers Association.

RETAIL & WHOLESALE 	  

Tiffany Announces $500M Stock-Buyback Program

Tiffany & Co.’s board of directors has approved a new stock buyback program under which the jewelry retailer can repurchase up to $500 million of the company’s common stock.

Tiffanys’ announcement comes after it unveiled a 6% drop in total sales in the two months to December 31, with performance hit by a strong U.S. dollar and lower levels of tourist spending. The company’s share price slid 7.3% during the week to January 21.

The new repurchase program replaces the company’s existing stock repurchase program announced in March 2014.

PC Jewellers 3Q Revenue, Profit Soar

India-based PC Jeweller reported revenue on a standalone basis jumped 20% year on year to $320.3 million (INR 21.8 billion) in the third quarter that ended December 31 mainly because of surging domestic sales. Net profit for the quarter soared 34% to $21.5 million.

Revenue from within India grew 22% to $233 million compared with a year ago, while exports advanced 13% to $87.4 million, the online jewelry company said.

MINING 	  

Petra Diamonds 1H Sales -28%

Petra Diamonds reported revenue slumped 28 percent year on year to $154 million in the first half that ended December 31. Excluding exceptional precious stones, sales dived 18 percent to $144 million.

Production rose 2 percent from a year ago to 1.6 million carats, above the company’s target of 1.5 million carats. Petra remains on track to reach its full-year output guidance of 3.3 to 3.4 million carats to June 30, 2016, the company said.

Lucapa Recovers Largest Lulo Diamond

Lucapa Diamond Company recovered a 133.4-carat diamond from its Lulo Diamond Project in Angola, the largest so far from the mine as it eclipsed a previous record of 131.4 carats set in 2012. The diamond is “not of high quality,” the miner said.

The discovery comes after heavy rains restricted access to the company’s planned mining areas during the fourth quarter to December 31. Lucapa assigned earth-moving equipment to higher-lying areas of interest to trial new mining blocks. One of these new areas was Mining Block 6. In the first few days, Lucapa recovered diamonds weighing 133.4 carats, 29.2 carats, 12.37 carats and 11.1 carats.

Murowa Mine Aims to Produce 1M Carats in 2016

Murowa Diamonds, a Zimbabwean mining business exited by Rio Tinto last year, wants to expand production fourfold this year, according to a Bloomberg report. The company will inject $60 million into the mine over the next four years, the report added.

“Our plan is to produce more than a million carats this year,” the news agency cited Lovemore Chimuka, a spokesman for the company, as saying. Production was 250,000 carats in 2015, he said. Rio Tinto sold its 78-percent stake in Murowa last June.

Stellar Finds 55-Carat Diamond at Baoulé Mine

Stellar Diamonds recovered a 55-carat gem at its Baoulé kimberlite pipe in Guinea, which the company claims as evidence that the mine is a potential source of large diamonds.

The stone appears to have a ‘boart’ – or fragmented – exterior and a potentially better-quality diamond on the interior, the West Africa-focused diamond-development company said.

BHP Billiton, Peregrine End Chidliak Royalty Deal

BHP Billiton Canada (BHPB) settled litigation with Peregrine Diamonds and ended a royalty agreement with the diamond miner related to the Chidliak project in Canada.

Under the royalty arrangement, Peregrine had granted BHPB 2% of future mineral production, including diamonds, from the Chidliak asset. A dispute between the companies arose in May 2015 in regard to BHPB’s transfer of the royalty to South32, a company formed when BHPB demerged.

GENERAL 	  

Cindy Edelstein Passes Away

The jewelry world is mourning the passing of Cindy Edelstein, an entrepreneur, author, editor and long-time consultant to the industry, who died January 24 at the age of 51. The cause was heart failure, according to a post on Instoremag.com.

Edelstein began her career at JCK magazine and had a notable careers as a trade-show consultant and creator and writer and in 1991 founded the Jewelers Resource Bureau with her husband, Frank Stankus, to highlight jewelry designers and their work. She won numerous awards and was a long-serving member of the board of the Womens Jewelry Association.

GIA Opens Expanded Botswana Facility

The Gemological Institute of America (GIA) opened an expanded laboratory and education facility in Gaborone, Botswana, January 19 to support its beneficiation efforts in the African nation by bringing value-added services to gem-producing countries. The expansion includes more classroom space.

The GIA is advancing its goal of making Gaborone the destination for industry-leading gemological education in Africa, it said.

London Bourse Releases Guide to Preventing Investment Scams

The London Diamond Bourse published consumer advice to prevent the public from becoming victims of “boiler-room” scams claiming to sell highly lucrative investment diamonds.

The advice, available on the public area of the London Diamond Bourse website, was developed by the gem exchange and the U.K.’s Insolvency Service. Simon Rainer, a former chief executive officer of the British Jewellers Association, was a consultant for the project.

7th Antwerp Diamond Trade Fair to Start Jan. 31

The 7th Antwerp Diamond Trade Fair (ADTF) will be held from January 31 to February 2 in the halls of the Antwerp Diamond Bourses.

As part of the three-day event, an “Antwerp Diamond Night” is scheduled for January 31. Two conferences will also be held: “Who is afraid of lab-grown diamonds?” organized by the International Gemological Institute, and another titled “What is luxury?”

ECONWATCH 	  

Diamond Industry Stock Report

Anglo American (+24%) led mining shares this past week as subsidiary De Beers announced improved diamond sales. Signs of a recovery in the rough market also seem to have aided Stellar (+22%), Gem Diamonds (+20%), Petra (+14%), Mountain Province (+11%) and ALROSA (+8.1%). U.S. retailers were mainly stable or strengthened, led by J.C. Penney (+9.8%), after many had fallen the previous week. There were signs of improvement across Asia and Europe.

View the detailed industry stock report.
Jan. 28 (12:45 GMT) Jan. 21 (11:45 GMT) Chng.
$1 = Euro 0.92 0.92 0.001
$1 = Rupee 68.20 67.99 0.2
$1 = Israel Shekel 3.96 3.97 -0.01
$1 = Rand 16.30 16.69 -0.39
$1 = Canadian Dollar 1.41 1.45 -0.04

Precious Metals Chng.
Gold $1,119.68 $1,099.25 $20.43 1.9%
Platinum $881.23 $818.26 $62.97 7.7%
Silver $14.38 $14.03 $0.35 2.5%

Stock Indexes Chng.
BSE 24,469.57 23,962.21 507.36 2.1%
Dow Jones 15,944.46 15,766.74 177.72 1.1%
FTSE 5,942.66 5,697.07 245.59 4.3%
Hang Seng 19,195.83 18,542.15 653.68 3.5%
S&P 500 1,882.95 1,859.33 23.62 1.3%
Yahoo! Jewelry 996.92 969.60 27.32 2.8%

Rapaport Weekly Market Comment February 4, 2016

All eyes on China as next week’s Spring Festival sets pace for jewelry sales. Polished trading improving as U.S. jewelers replenish stock following holiday season. Cutters increasing production after estimated $1B of rough enters the market in Jan. Concern that new polished supply may exceed demand. Shortages supporting prices as Jan. 1ct. RAPI +0.9%. LVMH 2015 jewelry & watch sales +19% to $3.7B, profit +53% to $482M. Titan 3Q sales +17% to $504M, profit +18% to $33M. Letšeng 4Q rough sales -5% to $64M, average price -1% to $2,117/ct. Belgium 2015 polished exports -9% to $13.1B, rough imports -25% to $11.1B.The Rapaport Group wishes all our friends a happy Chinese New Year.

RapNet Data: February 4

Diamonds 1,080,600
Value $7,955,958,970
Carats 1,237,170
Average Discount -27.81%

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 global diamond industry took a beating this year.

Ari Epstein, CEO of the Antwerp World Diamond Centre, on Belgium’s drop in rough and polished exports in 2015

MARKETS 	  

United States: Jewelry retailers holding relatively large inventory with a lot of goods on memo. Positive sentiment with interesting designs at Miami Antique Show, Arizona Centurion Jewelry Show and AGTA GemFair in Tuscon...

Belgium: Dealers relatively positive and polished prices firm following De Beers January reduction in rough prices. Short-term outlook positive but some concern about possible excess supply when new polished enters the market...

Hong Kong: Diamond dealer and wholesale jewelry markets quiet with most businesses closed for the Chinese New Year Spring Festival that begins on Monday (Feb😎. Hong Kong wholesale market expected to shut down for the week and China for most of February...

India: Polished trading slows slightly as Hong Kong and Chinese wholesale buyers close for Chinese New Year vacation. Domestic Indian demand cautious as weak rupee (-2.6% from Jan. 1 to 68/$1) weighs on sentiment...

Israel: Positive sentiment continues after relatively good start to the year. Steady demand and shortages for RapSpec A2+ (3X, none) diamonds...

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INSIGHTS 	  

Rough Market Enthusiasm

Demand for rough diamonds improved significantly in January, leaving many to wonder if the sudden upturn is sustainable. Manufacturers demanded more rough than was available as miners De Beers and ALROSA limited their respective supplies amid continued uncertainty in consumer demand…

Click here to continue readin

INDUSTRY 	  

Polished Diamond Prices Rise in January

Polished diamond prices rose in January as shortages continue to support the market. U.S. demand is steady after a reasonably good holiday season, while China’s wholesale market slowed as the focus shifted to retail for the Chinese New Year Spring Festival starting on February 8.

The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rose 0.9% in January. RAPI for 0.30-carat diamonds advanced 4.7% and RAPI for 0.50-carat diamonds grew 4.5%. RAPI for 3-carat diamonds fell 0.5%.

RAPI for 1-carat diamonds fell 4.4% from a year ago as manufacturers sought to reduce excess inventory in 2015.

Belgium’s 2015 Polished Exports -9%

Belgium’s polished diamond exports dropped 9.4% to $13.07 billion in 2015 as the global trade “took a beating” during the year, according to the Antwerp World Diamond Centre (AWDC). By volume, exports fell 7.1% to 6 million carats, while the average price dipped 2.4% to $2,251 per carat.

Total polished imports to Belgium declined 8.4% to $12.65 billion during the year as net polished exports, representing exports minus imports, dived 31% to $415.8 million. Rough imports slumped 25% to $11.13 billion and rough exports declined 27% to $11.5 billion. Net rough imports, representing imports minus exports, went from negative $744.3 million to negative $371.6 million during the year.

Belgium’s 2015 net diamond account, representing total polished and rough exports minus total imports, declined 41% to $787.4 million.

Forevermarks Lussier Appointed DPA Chairman

Stephen Lussier, chief executive officer of De Beers Group’s Forevermark brand, has taken over as chairman of the Diamond Producers Association (DPA) from Jean-Marc Lieberherr.

Lieberherr, who until recently was the managing director of Rio Tinto’s diamond division, became the DPA’s first chairman in October 2015, shortly after the body was set up. He stepped down from the role following his departure from Rio Tinto in January.

Lussier, a vice-president of marketing at De Beers, was the vice-chairman of the DPA under Lieberherr. Jim Pounds, an executive vice-president at Dominion Diamond Corporation, will revolve into Lussier’s former role at the DPA.

International Grown Diamond Association Launched

More than 10 lab-grown diamond producers, distributors and retailers have partnered to launch the International Grown Diamond Association (IGDA), claiming the group is the "first" industry body for the synthetics sector.

The association aims to represent the grown diamond industry, promote it as a new choice and educate consumers about their qualities and applications.

Shmuel Schnitzer Elected IDI Chairman

Former Israel Diamond Exchange president Shmuel Schnitzer has been elected chairman of the Israel Diamond Institute Group of Companies (IDI).

Schnitzer recently completed his fourth term as IDE president and replaces Moti Ganz, who served three terms as chairman of the IDI, a non-profit company representing institutions in the diamond industry.

RETAIL & WHOLESALE 	  

U.S. Jewelry Sales +2% in 2015

U.S. jewelry sales from all retail outlets increased 2% to $66.41 billion in 2015. Watch sales advanced 2.6% to $8.72 billion compared with the previous year, according to provisional figures released by the Bureau of Economic Analysis. Sales of jewelry and watches combined totaled $75.14 billion, a 2.1% increase over 2014.

In the final month of 2015, jewelry sales increased 2% year on year to $13.27 billion, according to Rapaport News estimates. Watch sales increased 2.6% to $1.76 billion. Jewelry and watch sales combined increased 2.1% to $15.03 billion.

LVMH’s 2015 Jewelry Sales +19%

LVMH Moët Hennessy Louis Vuitton reported watch and jewelry revenue grew 19% to $3.69 billion (EUR 3.31 billion) in 2015 over the previous year on stronger Bulgari results and a successful refocusing of TAG Heuer. Taking into account exchange-rate fluctuation and with a “comparable structure,” sales in the jewelry and watch division advanced 8%.

Profit from recurring operations in the watches and jewelry division surged 53% to $481.8 million while the operating margin improved by 2.9 percentage points to 13.1%.

Christie’s Jewelry Sales Drop

Christie’s jewelry sales from live auctions and ecommerce slumped to $624.1 million in 2015 from $754.7 million that the auction house reported in the previous year. Jewelry revenue declined at a faster rate than the company’s flagship art business.

Art sales dipped 5% in to $7.4 billion (GBP 4.8 billion) but still achieved the second highest total in company history.

Titan’s 3Q Revenue +17%

India-based jeweler Titan Company reported revenue increased 17% year on year to $504.6 million (INR 34.26 billion) in the third quarter that ended December 31 as retail sales improved during the festive season.

The strong result was mainly because of 20% growth in jewelry sales to $415.3 million from a year ago, Titan’s managing director Bhaskar Bhat explained. Watch sales increased 8.2% to $70.5 million. Profit after tax during the quarter jumped 18% to $33.2 million.

Tiffany in Deal to Sell Fragrances

Tiffany & Co. has announced a licensing deal with global beauty company Coty to sell fragrances at the jeweler’s stores and other select luxury retailers. The two companies will develop, produce and distribute Tiffany fragrances for men and women.

Founded in Paris in 1904, Coty’s portfolio includes well-known fragrances, color cosmetics and skin and body care products sold in more than 130 countries and territories.

Richemont Buys Remaining 40% of Roger Dubuis

Switzerland-based luxury group Richemont acquired the 40% of watchmaker Roger Dubuis it did not already own, Reuters reported.

"We now own 100% of Roger Dubuis," the news agency cited Richemont spokeswoman Sophie Cagnard as saying. Richemont and Roger Dubuis declined to comment on the sale price, the report said January 22. Richemont purchased a 60% stake in 2008 for an undisclosed amount.

Amazon’s Profit Disappoints

Amazon reported sales surged 22% year on year to $35.7 billion in the fourth quarter that ended December 31. Excluding the unfavorable impact of exchange-rate fluctuation, sales surged 26%. Sales were within guidance of $33.5 billion to $36.75 billion issued ahead of the holiday quarter but profit reportedly fell short of many analysts’ expectations.

Net income for the quarter more than doubled to $482 million with diluted earnings per share of $1 compared to 45 cents a year earlier. Analysts estimated the retailer would earn $1.56 a share during the quarter, The New York Times reported.

BaubleBar Gets $20M Funding

Online jewelry retailer BaubleBar has raised $20 million of new funding from investors, according to a report by technology news site TechCrunch.

The ecommerce outfit, known for its ‘fast fashion’ approach to jewelry that involves reacting quickly to trends, closed on funding from existing investors Accel Partners, Greycroft Partners, Burch Creative Capital and Aspect Ventures and new investors including Hubert Burda Media and DSW, according to the report.

MINING 	  

ALROSA’s 2015 Production +6%

ALROSA’s production increased 6% year on year to 38.3 million carats in 2015. The company sold 30 million carats of diamonds in 2015, which was 24% below the 39.5 million carats sold in 2014, according to Rapaport records. Revenue from rough sales are expected to be at least $3.4 billion.

In the final quarter of 2015, ALROSA’s production decreased 18% year on year to 8.6 million carats. The company sold 7.1 million carats during the period, including 4.1 million of gem-quality diamonds at an average price of $166 per carat.

Gem Diamonds’ 4Q Letšeng Sales Drop

Gem Diamonds sold $64.3 million worth of stones from its Letšeng mine in Lesotho in the fourth quarter that ended December 31. The figure was 5% below the $67.7 million reported by the company a year earlier. The average price achieved, including carats extracted at rough value for polishing, fell 1.1% year on year to $2,117 per carat from two Letšeng tenders held during the period.

The company sold 30,357 carats during the quarter, 4% fewer than a year before. Production from the mine increased 14% to 29,100 carats.

For 2015 as a whole, sales from Letšeng decreased 15% $236.3 million compared with 2014.

BlueRock Approves Acquisition of Diamond Resources

BlueRock Diamonds has approved the purchase of Diamond Resources from Tawana Resources. Diamond Resources is a non-trading company which holds the ‘rehabilitation guarantee’ required in relation to the Kareevlei project in South Africa, which BlueRock acquired from the same seller in 2013.

BlueRock, which is quoted on the Alternative Investment Market of the London Stock Exchange, also purchased an intercompany loan of $1.3 million (ZAR 21.5 million) owed by Diamond Resources to Tawana which is expected to be eliminated on consolidation in the companys accounts. BlueRock paid $43,556 for the shares in Diamond Resources and the loan, a statement said.

GENERAL 	  

Marketing Panel to be Held at IDWI

The Israel Diamond Exchange (IDE) will host a marketing panel discussion on February 15 at 4 p.m. featuring high-profile figures from the diamond and jewelry industry at the upcoming International Diamond Week.

Panelists at the event will be Jean-Marc Lieberherr, former chairman of the Diamond Producers Association (DPA); Alex Popov, chairman of the World Diamond Mark Foundation (WDM); Patricia Syvrud, executive director of the World Diamond Council; and renowned jewelry designer Stephen Webster, who is also the guest of honor at the International Diamond Week in Israel.

Jewelry Industry Summit Unveils Speaker List

The Jewelry Industry Summit has released its roster of speakers who will participate in the three-day forum on sustainability and responsible sourcing.

The event will be held at the Fashion Institute of Technology in New York from March 11 to 13.

DEF Unveils New Officers, Board Members

The Diamond Empowerment Fund (DEF) has announced a new slate of officers and new board members.

Phyllis Bergman, chief executive officer of Mercury Ring, continues as president for 2016. Ed Hrabak, chief operating officer of Signet Jewelers, has been elected vice president. Yancy Weinrich, group vice president of JCK, was elected secretary and Rich Slomovitz, chief financial officer of Rush Communications, remains treasurer.

ECONWATCH 	  

Diamond Industry Stock Report

Mining stocks continued to perform strongly this past week, led by ALROSA (+11%) and Anglo American (+9.9%). U.S. retail stocks generally grew in value, headed by J.C. Penney (+11.5%). In the Far East, performances were mixed, with ValueMax Group (-5.3%), Sarine (-4.8%) and Chow Sang Sang (-4.5%) all declining. Indian stock mostly had a tough week, with drops led by Goldiam International (-11.4%).

View the detailed industry stock report.
Feb. 4 (10:40 GMT) Jan. 28 (12:45 GMT) Chng.
$1 = Euro 0.89 0.92 -0.022
$1 = Rupee 67.69 68.20 -0.5
$1 = Israel Shekel 3.91 3.96 -0.05
$1 = Rand 15.86 16.30 -0.44
$1 = Canadian Dollar 1.37 1.41 -0.04

Precious Metals Chng.
Gold $1,146.21 $1,119.68 $26.53 2.4%
Platinum $888.99 $881.23 $7.76 0.9%
Silver $14.77 $14.38 $0.39 2.7%

Stock Indexes Chng.
BSE 24,338.43 24,469.57 -131.14 -0.5%
Dow Jones 16,336.66 15,944.46 392.20 2.5%
FTSE 5,923.65 5,942.66 -19.01 -0.3%
Hang Seng 19,183.09 19,195.83 -12.74 -0.1%
S&P 500 1,912.53 1,882.95 29.58 1.6%
Yahoo! Jewelry 993.20 996.92 -3.72 -0.4%

Rapaport Weekly Market Comment February 11, 2016

Polished trading slows as Chinese buyers vacation over Lunar New Year. Consumer demand slow but steady with concerns that sluggish global economy and weak stock markets will lead to negative wealth effect. Shortages supporting prices for specific goods which are in demand. Large volume of new polished expected in 2Q after Jan. rough buying spree. Botswana’s 2015 rough exports -39% to $2.4B. Rio Tinto’s 2015 diamond sales -23% to $698M, earnings +32% to $104M. Asian Star 3Q revenue -3% to $102M, profit -25% to $2M. Blue Nile 4Q sales -5% to $150M, profit +4% to $5M. U.S. 2015 polished imports -4% to $23.1B, exports -12% to $18.3B. De Beers to launch grading at UK lab on March 1.

RapNet Data: February 11

Diamonds 1,085,796
Value $7,869,567,573
Carats 1,223,918
Average Discount -27.82%

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
February 10-22 Wed-Mon

Rapaport Single Stone Auction 

New York & Israel

View Details February 14-18 Sun-Thu

International Diamond Week

Ramat Gan, Israel

View Details
Feb-Mar 22-4 Mon-Fri

Rapaport Melee Auction

New York & Hong Kong View Details

March 9-16 Wed-Wed

Rapaport Single Stone Auction

New York & Israel View Details

QUOTE OF THE WEEK
We sold a record number of engagement rings, expanded gross margin rate, and drove success in our new Webroom. As we look out on 2016, we will push harder on elements that are working: engagement ring units, wedding band attach rates, continued expansion of margin, and the Webroom concept.

Blue Nile chairman, CEO and president Harvey Kanter on fourth-quarter results

MARKETS 	  

United States: Polished trading is steady and dealers maintain a positive outlook. New York prices are firm with limited supply in select categories of RapSpec A2 (3X, none) that are in demand...

Belgium: Antwerp cautious as dealers are uncertain in which direction the market is heading. Demand is okay but market prices are relatively high due to shortages, particularly for smaller goods...

Hong Kong: Diamond markets closed for the Chinese New Year vacation. Hong Kong dealers expected to start returning next week, while Chinese market is shut down through most of February...

India: Polished trading slowed slightly as Hong Kong and China went on vacation. U.S. demand consistent and supporting the market. Domestic demand cautious with weak rupee (-2.6% to 67.9/$1 in 2016) affecting confidence and adding to local expenses...

Israel: Trading slowed slightly with Chinese buyers on vacation for the Lunar New Year. U.S. demand is steady. Some foreign buyers in Ramat Gan looking for goods in anticipation of next week’s International Diamond Week...

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INSIGHTS 	  

Organized Synthetics

The natural diamond trade should welcome the establishment of the International Grown Diamond Association (IGDA) announced last week even though it may actually serve as a wake-up call for the industry…

Click here to continue reading

INDUSTRY 	  

U.S. Polished Imports -4% in 2015

Polished imports to the U.S fell 4% to $23.1 billion in 2015 after the trade registered a relatively slow end to the year. By volume, polished imports dropped 5% to 11.125 million carats, while the average price of the imports rose 1% to $2,076 per carat, according to provisional government data.

Polished exports by the U.S. dropped 12% to $18.32 billion, taking net polished imports – imports minus exports – to $4.78 billion, a jump of 53% from the previous year.

Botswana’s Export Slump Weighs on Economic Growth

A slump in global demand for diamonds hit Botswana’s economic growth as exports of rough diamonds fell 39% to $2.41 billion in 2015, according to provisional data published by the Bank of Botswana.

“The continued slowdown of growth in the global economy, particularly in the major markets for our diamonds, has had profound impact on the domestic economy,” Kenneth Matambo, Botswana’s minister of finance and development planning, said in his budget speech for 2016 on February 1.

De Beers to Launch Non-Forevermark Grading from U.K. Lab

De Beers will offer grading of non-Forevermark diamonds from its U.K. laboratory for the first time from March 1 as the company expands a service currently existing in Antwerp and Surat.

The miner’s research company, International Institute of Diamond Grading & Research (IIDGR), will open up the general grading service to the entire trade including retailers and those outside the U.K. It will include IIDGR’s Diamond Grading Reports and the more concise Diamond Identification Report. The service has been running in Belgium since 2012 and in India since mid-2015.

Fancy Color Diamond Prices Rise

Fancy color diamond prices increased 0.3% on average during the fourth quarter of 2015 as better-than-expected holiday sales outweighed sluggish Asian demand, according to the Fancy Color Diamond Index. Lower supply from diamond producers have led to a shortage of fancy yellow gems.

Prices for the fancy yellow segment performed the strongest, increasing 1.1%, the Fancy Color Research Foundation said. Within the yellow category, 3-carat diamonds demonstrated a 2.7% price increase and 5-carat stones rose 4.4%, likely driven by low availability in rough tenders.

Asian Star’s 4Q Revenue -3%, Profit -25%

India-listed Asian Star reported quarterly revenue declined 2.6% year on year to $101.7 million (INR 6.9 billion) in the three months that ended December 31. Profit slumped 25% to $2.2 million.

Diamond sales slipped 0.5% to $889.9 million during the quarter. Jewelry sales totaled $17.8 million, representing a 12% decrease over a year before, the diamond manufacturer and De Beers sightholder said.

American Gem Society CEO to Retire

Ruth Batson, chief executive officer of the American Gem Society (AGS) and AGS Laboratories, will retire after 23 years, with her departure scheduled for the summer of 2017. The AGS board of directors will form a committee to hire a new CEO.

“Ruth will participate in the search and onboarding process of the new CEO,” said Louis Smith, AGS president. “We are confident that we will find a great successor to guide the organization forward. Ruth has generously provided us with ample time to make a seamless transition."

WJA Names 2016 Hall of Fame Honorees

The Women’s Jewelry Association has named its Hall of Fame honorees for the association’s annual Awards for Excellence gala scheduled for July 25 at the Hammerstein Ballroom in New York.

Sissy Jones, owner of Sissys Log Cabin, will receive the Lifetime Achievement Award; Peter Engel, president of Fred Meyer Jewelers, will receive the Ben Kaiser Lifetime Achievement Award; and longstanding jewelry retailer Ben Bridge Jeweler will receive the Corporate Award.

Scio Diamond Gets 28th Patent for Lab-Grown Stones

Scio Diamond Technology Corporation, a producer of lab-grown diamonds, got its 28th patent for gemstone production from chemical vapor deposition (CVD) diamond plate.

The company creates high-quality, type-IIa, single-crystal diamonds in a controlled laboratory setting, it said. Its diamonds are used in jewelry and for industrial applications.

RETAIL & WHOLESALE 	  

Blue Nile’s 4Q Sales -5%

Blue Nile reported net sales fell 4.8% year on year to $150 million in the fourth quarter that ended January 3 because of continued weakness in high-ticket purchases and foreign currencies. Selling prices for core engagement products slipped.

U.S. engagement net sales declined 7.7% to $78.4 million, while U.S. non-engagement net sales retreated 0.3% to $48.7 million.

Profit rose 4.3% as the cost of sales was cut 6.2% to $120.9 million. The online jewelry seller announced a first-ever dividend of $0.70 per share.

Pandora Closes 1,422 Unbranded Stores in 2015

Pandora closed 1,422 unbranded stores in 2015 and increased its focus on branded and concept stores, as total revenue for the year grew 40%. The Denmark-based jeweler opened a net total of 392 concept stores during the year, including 136 in the fourth quarter that ended December 31.

Revenue from concept stores increased 54% to $1.57 billion (DKK 10.4 billion), while total branded stores – which include concept stores – advanced 45% to $2.24 billion.

Total company revenue for the year soared 40% to $2.52 billion on strong growth across the major regions and product groups. Net profit increased 19% to $554 million.
Kohl’s 4Q Sales Steady

Department-store chain Kohl’s Corporation reported comparable sales increased 0.4% in the fourth quarter to January as a stronger holiday season from Thanksgiving week to Christmas was offset by a slow start to the period and a weaker-than-expected January. Total sales increased 0.8%.

The company lowered its earnings guidance because of lower fourth-quarter sales and gross margin than planned.

MINING 	 

Rio Tinto’s 2015 Diamond Sales -23%

Rio Tinto reported diamond revenue slumped 23% to $698 million in 2015 as market conditions drove down rough prices. Lower demand from India and China, higher rough and polished inventory and lower trade manufacturing margins forced prices to dip.

Diamond production fell 25% to 17.4 million carats. Rio Tinto forecast output to increase 21% to 21 million carats in 2016.

‘Lesedi La Rona’ Chosen as Name for Worlds Second-Largest Diamond

The 1,111-carat diamond recovered by Lucara Diamond Corp. in Botswana in November has been named ‘Lesedi La Rona’ following a competition among locals to label the gem.

The name, which means ‘Our Light,’ was given by Thembani Moitlhobogi, the winner of a $2,196 (BWP 25,000) prize, according to a Lucara statement February 9. The contest was only open to Botswanan citizens, including the miner’s employees.

The type-IIa gem was the largest diamond ever recovered in Botswana and the second largest ever found in the world.

Lucara Schedules First 2016 Exceptional Stone Tender

Lucara Diamond Corp. will hold its first exceptional stone tender of 2016 from April 4 to 13 in Gaborone, Botswana. The tender will feature ten diamonds with a combined weight of 1,525 carats, including a 296-carat, type-IIa gem.

The event will not feature any of the three exceptional diamonds recovered in November that included a 1,111-carat, type-IIa stone from the Karowe mine in Botswana, the second largest diamond in history.

GENERAL 	  

Italy’s Fiera di Vicenza Mulls Listing

The Italian company behind the annual VicenzaOro jewelry show is considering listing its shares on the Milan Stock Exchange.

Fiera di Vicenza’s board of directors told shareholders it was considering the move at a meeting of investors February 3, according to a statement. A stock-market flotation is “supported by strategic and economic objectives.”

Madoff Jewelry Up for Auction Online

Jewelry and watches formerly owned by convicted fraudster Bernie Madoff and his wife Ruth are being auctioned online by Texas-based company Gaston & Sheehan Auctioneers.

Items on offer include two Patek Philippe timepieces, with latest bids of $30,200 and $24,544 as of February 8, according to listings on the auctioneer’s website. An 18-karat white-gold bracelet by Sabbadini in Milan set with 654 round diamonds, with an approximate total weight of 48.11 carats, had a bid of $26,205. Bidding ends February 16.

JAPAC Raises Over $25K in 2015

Jewelers of America Political Action Committee (JAPAC) raised $26,680 in 2015 to support its advocacy efforts in Washington DC, according to Jewelers of America (JA).

“JAPAC gives the jewelry industry a platform to have a collective voice on issues,” said Jenny Caro, JAPAC chair and co-owner of Jewelry By Designs in Woodbridge, Virginia. “These funds are an important tool in preparing JAPAC for the essential 2016 election year.”

ECONWATCH 	  

Diamond Industry Stock Report

U.S. and European retail stocks had a tough week, with drops led by Birks Group (-21%), Kohls (-22%), Damiani (-15.5%) and Charles & Colvard (-14%) as major stock indexes around the world declined. Mining stocks generally dipped, led by Rockwell Diamonds (-14%), but there were improvements for Stornoway Diamond (+5.5%), Mountain Province (+3.1%) and Anglo American (+3%).

View the detailed industry stock report.
Feb. 11 (11:41 GMT) Feb. 4 (10:40 GMT) Chng.
$1 = Euro 0.88 0.89 -0.012
$1 = Rupee 68.42 67.69 0.7
$1 = Israel Shekel 3.89 3.91 -0.02
$1 = Rand 15.91 15.86 0.05
$1 = Canadian Dollar 1.40 1.37 0.03

Precious Metals Chng.
Gold $1,218.40 $1,146.21 $72.19 6.3%
Platinum $939.33 $888.99 $50.34 5.7%
Silver $15.45 $14.77 $0.68 4.6%

Stock Indexes Chng.
BSE 22,951.83 24,338.43 -1,387 -5.7%
Dow Jones 15,914.74 16,336.66 -421.92 -2.6%
FTSE 5,553.04 5,923.65 -370.61 -6.3%
Hang Seng 18,545.80 19,183.09 -637.29 -3.3%
S&P 500 1,851.86 1,912.53 -60.67 -3.2%
Yahoo! Jewelry 966.43 993.20 -26.77 -2.7%

http://www.novinky.cz/koktejl/394942-v-angole-nasli-jeden-z-nejvetsich-diamantu-v-historii.html

Rapaport Weekly Market Comment February 18, 2016

TRADE CAUTION: The recent surge of rough diamond prices on the secondary market is dangerous and unsustainable. Current polished price levels reflect artificial shortages created by 42% decline of rough supplies in 2H 2015. Production now normalizing which will soon significantly increase polished supply while overall demand remains weak. Chow Tai Fook Lunar New Year sales -29%. De Beers 2015 earnings -72% to $258M, revenue -34% to $4.7B, rough sales -36% to $4.1B, 2H rough sales -53% to $1.4B. ALROSA 2015 rough sales estimated -30% to $3.4B, 2H -26% to $1.6B. Gitanjali 3Q sales -2% to $499M, profit -18% to $12M. Jean-Marc Lieberherr appointed CEO of Diamond Producers Association.

RapNet Data: February 18

Diamonds 1,102,974
Value $7,857,697,357
Carats 1,231,328
Average Discount -27.95%

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
Feb-Mar 22-4 Mon-Fri

Rapaport Melee Auction

New York & Hong Kong

View Details
March 1-5 Tue-Sat

Hong Kong International Diamond, Gem & Pearl Show

Hong Kong

Booth: AWE 2-U10 & AWE MR201B-01

View Details
March 9-16 Wed-Wed

Rapaport Single Stone Auction 

New York & Israel

View Details March 17-22 Thu-Tue

Rapaport Rough Tender

Surat, India View Details

QUOTE OF THE WEEK
We are asking our suppliers to carefully map their supply chains more rigorously than ever before.

Mark Light, chief executive officer of Signet, on the jewelers new Signet Responsible Sourcing Protocol for Diamonds

MARKETS 	  

United States: New York polished prices remain firm despite slowdown in trading volume.Wholesalers are selling off old inventory and trading is driven by orders for specific goods rather than inventory purchases...

Belgium: Polished trading is quiet. Dealers are more positive about the market than they were toward the end of last year even as trading is slow...

Hong Kong: Polished trading quiet as dealers slowly return from Chinese New Year. Initial reports about the holiday season were weak as tourist arrivals fell and political unrest weighed on sentiment...

India: Market remains relatively slow with Chinese buyers still on vacation for Chinese New Year. Trading expected to improve in the coming weeks as dealers prepare for the Hong Kong show...

Israel: Mixed sentiment during International Diamond Week (Feb. 14-18). Lots of offers but few deals as suppliers hold prices firm. Difficult to find the right goods at the right price...

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INDUSTRY 	  

Signet Unveils Responsible Sourcing Protocol

Signet Jewelers launched a responsible diamond sourcing protocol that it claims will increase transparency and improve the integrity of the global supply chain.

The U.S.-based jeweler, the world’s largest retailer of diamond jewelry, developed the Signet Responsible Sourcing Protocol for Diamonds (D-SRSP) with input from exporters in the diamond industry, civil society and governments.

The protocol requires suppliers to undertake due diligence on the sources of the diamonds they deliver to Signet. The company envisages it becoming an accepted industry reference for responsibly sourced diamonds.

Ex-Rio Tinto Diamonds Chief Takes CEO Role at DPA

Former Rio Tinto diamond chief Jean-Marc Lieberherr will take on the role of chief executive officer of the Diamond Producers Association (DPA). Lieberherr was previously chairman of the DPA until his recent exit from Rio Tinto, where he was managing director of the miner’s diamond business.

The DPA chairmanship will be taken by Stephen Lussier, executive vice president of marketing at De Beers and chief executive officer of the Forevermark brand. Jim Pounds, executive vice president for diamonds at Dominion Diamond Corporation, has been appointed vice chairman of the association.

Swiss Watch Exports Continue Decline

Swiss watch exports continued to decline in January as shipment numbers to Hong Kong and the U.S., the industry’s largest trade partners, showed little sign of improving.

Exports fell 7.9% year on year to $1.53 billion (CHF 1.52 billion) during the month, according to the Federation of the Swiss Watch Industry. Shipments to Hong Kong tumbled 33% to $207.6 million in January, its 12th consecutive month of steep decline. Exports to the U.S. fell 14% to $159.8 million, dropping for the fifth consecutive month.

Gold Demand Steady in 2015

Global gold demand in 2015 was virtually flat compared to 2014 at 4,212 tonnes as a strong second half compensated for a challenging start to the year, according to the World Gold Council (WGC). Sustained buying from central banks and a strong second half from China and India caused demand to rebound in the last six months.

Overall jewelry demand for the year fell 3% to 2,415 tonnes. While the year started slowly, the third and fourth quarters combined showed the strongest second-half total for gold jewelry in 11 years.

UAE ‘Ready to Back Venezuela’s KP Return’

The United Arab Emirates (UAE) is prepared to support Venezuela’s attempt to return to the Kimberley Process (KP), The National reported, citing Ahmed Bin Sulayem, the chairman of the Dubai Multi Commodities Centre (DMCC) and the new chairman of the KP.

Venezuela suspended itself from the Kimberley Process Certification Scheme in 2008 after diamantaires in the country were accused of trafficking in uncertified diamonds to evade domestic export taxes.

RETAIL & WHOLESALE 	  

Chow Tai Fook’s Chinese New Year Sales -29%

Chow Tai Fook reported a 29% decline in retail sales during the Chinese New Year period compared with a year ago as consumers in Mainland China shopped outside the country over the festive season.

Sales on the mainland between January 25 and February 14 plunged 30% versus the equivalent period in 2015 as locals traveled and spent money overseas. Hong Kong and Macau sales declined 23% because of a drop in tourist numbers to Hong Kong from the mainland and the continued weak retail sentiment in the region.

Blue Nile to Expand Bricks-and-Mortar Presence

Blue Nile will open a second ‘Webroom’ at the Westchester Mall in White Plains, New York, enabling visitors to view products and place orders in-store with the help of non-commissioned consultants.

Development of the location is underway, with the site expected to launch by early summer, the online jewelry retailer said. The company opened its first Webroom at the Roosevelt Field Mall in Garden City, New York, in June 2015. It plans to open four new Webrooms this year.

Michael Hill’s 1H Revenue +10%

Michael Hill reported group-wide first-half revenue jumped 9.7% year on year to $221.1 million (AUD 310.8 million). Same-store sales rose 5.4% in the six months that ended December 31. Profit for the period climbed 5.1% to $17.7 million from a year ago.

Sales in Australia, the jeweler’s largest regional sector, advanced 4.2% in local currency, while same-store sales increased 3.4%.

Gitanjali’s 3Q Revenue, Profit Dip

India-based Gitanjali Gems reported revenue declined 1.5% year on year to $499 million (INR 34 billion) in the third quarter that ended December 31 as a slump in diamond sales outweighed an increase in jewelry revenue.

The company sold diamonds worth $120.1 million during the three months, a 20% decline over a year ago, the Mumbai-listed jeweler said. Net profit for the period fell 18% to $11.6 million.

Tara Jewels’ 3Q Sales Rise 13%

India-based Tara Jewels reported sales increased 13% year on year to $83.6 million (INR 5.69 billion) in the third quarter that ended December 31. Net profit for the period advanced 2.9% to $2.4 million.

Sales in the nine months to December 31 rose 1.7% year on year to $180.2 million.

Signet to Cancel London Listing

Signet Jewelers announced it plans to delist from the London Stock Exchange (LSE) because of a lack of liquidity for its shares on the exchange and to streamline administration and cut costs associated with maintaining two listings.

The board reviewed the company’s stock-exchange listings last year and found the total trades placed on the LSE in the whole of 2014 equaled around five days of trading on U.S. exchanges.

MINING 	  

De Beers 2015 Earnings -58%

De Beers underlying earnings before interest and tax (EBIT) slumped 58% to $571 million in 2015 as demand for rough diamonds weakened and revenue fell.

Tighter operating cost control and favorable exchange rates partly offset the negative impact, with the consolidated unit cost declining to $104 per carat from $111 per carat.

Total revenue dived 34% to $4.67 billion as rough-diamond sales plunged 36% to $4.1 billion. The remaining $571 million was mostly generated by the Element Six industrial diamond business, as well as the Forevermark brand.

Lucapa Finds ‘Angola’s Largest Diamond’

Lucapa Diamond Company said it has recovered the largest recorded diamond ever found in Angola.

The 404.2-carat gem has been confirmed as a “top-tier,” type-IIa, D-color diamond, the miner said. It was recovered from alluvial mining at Mining Block 8 at the company’s Lulo Diamond Project in the African nation.

Gemfields’ Emerald, Beryl Production +41%

Gemfields reported emerald and beryl production from the Kagem mine in Zambia surged 41% year on year to 8.2 million carats in the quarter that ended December 31.

Ruby and corundum output from the miners Montepuez deposit in Mozambique slumped 53% to 1.6 million carats.

ALROSA Recovers 122-Carat Diamond

ALROSA recovered a 121.96-carat diamonds from its Jubilee kimberlite pipe in Russia. The stone was extracted by the company’s business unit Aikhal Mining and Processing Division (MPD) at processing plant No.14.

The diamond has an octahedral shape with dimensions of 31.28 х 30.00 х 28.57 mm and is transparent with moderate yellowish hue, according to a statement February 11. The diamond has small olivine, graphite and sulphide inclusions in the crystal.

De Beers to Axe 189 Jobs in South Africa

De Beers will cut 189 jobs in South Africa as part of a restructuring aimed at reducing overheads in the country.The miner will axe 121 positions at its corporate offices in Kimberley and Johannesburg as well as at the Venetia Mine the Venetia Underground Project in the Limpopo province. Another 68 roles may be reduced through natural attrition rather than layoffs.

De Beers Consolidated Mines, the company’s South African mining subsidiary, has shrunk over the past two years, and the business cannot maintain its current overheads designed for a much larger company, it said.

GENERAL 	  

VICENZAORO Visitors +5% to 35K

Total traffic at the VICENZAORO January trade show rose 5% to more than 35,000 visitors as international interest increased, according to the event’s organizers.

The fair in Vicenza, Italy, which was held from January 22 to 27, saw 19,381 buyers turn up, with 5% growth in the number of buyers from outside Italy to 8,774 from 130 countries, Fiera di Vicenza said. Italian operator numbers increased 4.3% to 10,607, indicating a possible recovery of the domestic market, the company said.

Numbers Up at AGTA GemFair Tucson

The 2016 AGTA GemFair Tucson from February 2 to 7 saw a “significant” increase in attending companies, with more buyers using preregistration, the show organizers said.

“This was one of the best shows we’ve ever had,” said Douglas Hucker, chief executive officer of AGTA. “The buzz about this show started a few months ago, and continued straight through to closing day. I honestly can’t remember a show where everyone I saw, from exhibitors to buyers, walked around with a smile on their face all day long.”

IDE Signs MoU with Hong Kong Jewelry Body

Israel Diamond Exchange president Yoram Dvash signed a memorandum of understanding (MoU) with his counterpart at the Jewellery Manufacturers Association of Hong Kong, Adam Lau, to increase cooperation between the two organizations.

The MoU was signed at the IDE trading hall during the sixth edition of International Diamond Week in Israel, which ended February 18.

International Diamond Week also saw the launch of the Israel Diamond Jewelry Association, the opening of the Diamond Technology Zone in the IDE as well as the launch of the Gemological Institute of America (GIA) laboratory in Israel. Dvash also signed an agreement to collaborate with the Istanbul Chamber of Jewelry.

AGTA Amends Code of Ethics

The American Gem Trade Association (AGTA) made amendments to its Code of Ethics and Principles of Fair Business Practice while recommending a new language to deal with source disclosure in commercial documents.

The amendments are related to due diligence such as requesting disclosure of treatments to gemstones, submitting new, unknown or questionable material to a reputable laboratory and responsible sourcing.

Separately, the new source-disclosure wording for commercial documents comprises a statement that the seller has no reason

ECONWATCH 	  

Diamond Industry Stock Report

Anglo American (+43%) led resurgent mining stocks this past week. In the Far East, Sarine (-7.3%), Chow Tai Fook (-2.8%) and ValueMax Group (-1.9%) declined, although the Hang Seng rose 4.4%. U.S. retail stocks generally climbed but Birks Group (-11.5%) and Blue Nile (-11%) lost value.

View the detailed industry stock report.
Feb. 18 (12:25 GMT) Feb. 11 (11:41 GMT) Chng.
$1 = Euro 0.90 0.88 0.018
$1 = Rupee 68.50 68.42 0.1
$1 = Israel Shekel 3.90 3.89 0.01
$1 = Rand 15.39 15.91 -0.52
$1 = Canadian Dollar 1.37 1.40 -0.03

Precious Metals Chng.
Gold $1,205.47 $1,218.40 -$12.93 -1.1%
Platinum $941.00 $939.33 $1.67 0.2%
Silver $15.27 $15.45 -$0.18 -1.2%

Stock Indexes Chng.
BSE 23,649.22 22,951.83 697.39 3.0%
Dow Jones 16,453.83 15,914.74 539.09 3.4%
FTSE 6,015.41 5,553.04 462.37 8.3%
Hang Seng 19,363.08 18,545.80 817.28 4.4%
S&P 500 1,926.82 1,851.86 74.96 4.0%
Yahoo! Jewelry 1,071.27 966.43 104.84 10.8%