Rapaport Weekly Market Comment February 25, 2016

Polished trading quiet as dealers prepare for Hong Kong show (March 1-7). Rising expectations for Far East demand despite weak Chinese jewelry sales. Prices holding steady as sellers await outcome of show. Rough demand firm during De Beers sight. Dominion 4Q sales -26% to $178M. Petra Diamonds 1H revenue -28% to $154M, loss of $2M vs. profit of $39M a year ago. Lucara 4Q revenue -8% to $65M, profit of $19M vs. loss of $17M. India Jan. polished exports -42% to $1B, rough imports +16% to $991M. Belgium Jan. polished exports -5% to $772M, rough imports -13% to $730M. MID tops Israel’s 2015 diamond exporter list. Rapaport launches Investment Diamond Grading Report (www.raplab.com).

RapNet Data: February 25

Diamonds 1,122,936
Value $7,949,693,006
Carats 1,248,062
Average Discount -27.59%

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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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
The diamond market experienced some weakening in 2015 and we retain a cautious outlook on diamond prices for 2016. We believe the long-term fundamentals for the diamond market remain strong.

William Lamb, president and CEO of Lucara Diamond Corp., on the miners 2015 results

MARKETS 	  

United States: Slow momentum in New York as dealers are buying to fill existing orders rather than for inventory. Shortages supporting prices of better-quality goods (RapSpec A2), while suppliers are still holding large volume of unwanted lower-quality diamonds...

Belgium: Sentiment improving in anticipation of next week’s Hong Kong International Jewellery Show. Buyers are pushing for higher discounts, while suppliers are holding prices firm ahead of the show...

Hong Kong: Rising expectations for next week’s show. Dealers are eager to resume trading since the Hong Kong market has been on hold for the past month during the Chinese New Year festival...

India: Polished trading stable. Dealers are preparing for the Hong Kong show and there is some expectation that Chinese demand will improve following the Chinese New Year retail selling period...

Israel: Polished trading and prices stable with dealers waiting for the Hong Kong show. Large delegation of 93 exhibitors participating in Israeli pavilion. Good demand for 0.30-0.50ct., D-H, VS-SI, RapSpec A2 and 1-2ct., D-H, VS-SI, RapSpec A2 diamonds...

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INSIGHTS 	  

Rising Diamond Production

The diamond mining sector is under pressure with production rising to peak levels at a time when rough sales are slumping and polished demand is sluggish. The major miners are holding above-average inventory that they have pledged to release slowly in an attempt to avoid over-supply to a market struggling in the face of its current downturn…

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INDUSTRY 	  

Rapaport Launches New Investment Diamond Grading Report

The Rapaport Group is pleased to announce the launch of a new diamond grading report – the Rapaport Investment Diamond Report (IDR). The new report conservatively grades diamonds based on Gemological Institute of America (GIA) standards. Additional gemological information including tint, location and color of inclusions as well as high resolution images are provided online and with the report.

All Rapaport Investment Diamond Reports are double tested, as they include an additional independent GIA diamond grading report. The IDR will only be issued for the best quality Round 0.50 ct. and larger, D-H, IF-VS2, excellent cut, polish and symmetry, Rapaport Specification A1 diamonds that, in the opinion of Rapaport gemologists, meet investment quality standards. Diamonds that lack overall brilliance, have features that limit trade liquidity or have borderline grades may not be issued IDR’s.

India’s Polished Exports -42% in January

India’s polished diamond exports dived 42% year on year to $1.04 billion in January, according to the nation’s Gem & Jewellery Export Promotion Council. By volume, polished exports slumped 36% to 1.8 million carats. Polished imports fell 47% to $197.3 million, leaving net polished exports 40% lower at $847.5 million.

Rough diamond imports increased 16% to $990.6 million during the month compared with a year earlier. Rough exports crept up 0.7% to $107.2 million, leaving net rough imports 19% higher at $883.4 million.

Smartwatch Shipments Overtake Swiss Watches

Global smartwatch shipments outnumbered those of Swiss watches for the first time ever in the final quarter of 2015 as the market for the electronic timepieces soared.

Shipments of smartwatches increased more than fourfold to 8.1 million units in the three months to December, while Swiss watch shipments declined 4.8% to 7.9 million units, according to research and consulting firm Strategy Analytics.

De Beers Launches Diamond Grading Service

The International Institute of Diamond Grading & Research (IIDGR), a unit of De Beers, has launched a diamond grading service in the Far East, Middle East, India and Europe.

IIDGR will provide a grading services from laboratories in Belgium, India and the U.K. The offering uses De Beers proprietary grading technology and is suitable for all sizes, colors, shapes and quality but will only be available for natural, untreated diamonds.

Belgium’s January Polished Exports Decline

Belgium’s polished diamond exports declined 4.5% year on year to $772 million in January, according to the Antwerp World Diamond Centre (AWDC). By volume, exports fell 8% to $397.9 million carats, while the average price rose 3.8% from a year ago to $1,940 per carat.

Polished exports to the U.S. fell 0.5% to $243.8 million. Exports to Hong Kong edged up 0.6% to $137.5 million despite a 31% surge in volume terms. Shipments to Israel fell 8.1% to $99.3 million.

GIA Grades Largest HPHT Diamond

The Gemological Institute of America (GIA) announced it graded the largest faceted blue synthetic diamond ever examined by the organization.

Researchers in the GIA’s New York laboratory inspected the emerald-cut, 5.03-carat HPHT-grown type-IIb stone produced by New Diamond Technology (NDT), a company based in St. Petersburg, Russia, and one of the founding members of the recently launched International Grown Diamond Association. The gem was graded as fancy deep blue, according to a lab note.

MID Leads List of Israel’s Top Diamond Exporters

MID House of Diamonds was ranked as the top diamond exporter from Israel in 2015, according to a list released by the diamond controller of the nation’s Ministry of Economy and Industry. The company exported $191 million net of diamonds during the year.

Leo Schachter Diamonds, which led the table the previous year, slipped to fourth place with $150 million of net exports in 2015 – a 48% decline, according to Rapaport News calculations. The list shows the top ten outbound shippers of the precious stones who agreed to release figures.

Water Leak Dampens Scio’s 3Q Revenue

Scio Diamond Technology Corp., a lab-grown diamond producer, said sales growth in the third fiscal quarter fell below its expectations as a water leak led to a temporary shutdown of its production base.

Revenue in the three months that ended December 31 still jumped 15% to $125,677 from a year ago, according to a Scio statement February 12. Net loss for the quarter was cut 4.3% to $1.3 million.

RETAIL & WHOLESALE 	  

U.S. Jewelry Prices Rise 7% in January

The U.S. consumer price index (CPI) for jewelry increased 6.7% in January from the previous month, according to the U.S. Bureau of Labor Statistics. The reading was 2.9% higher than a year ago.

The increase in prices comes alongside rises in polished diamond prices in January due to shortages, according to the RapNet Diamond Index (RAPI™). Data compiled by Bloomberg showed gold prices on Comex increased 6.4% between December 31 and February 1.

Jewelry Business Closings +10% in 2015

Jewelry business closings in the U.S. and Canada increased 10% to 1,114 in 2015, according to the Jewelers Board of Trade (JBT).

The number of businesses ceasing operations rose 20% to 956, the JBT said in a report. Mergers, sales and consolidations slumped 32% to 118. Bankruptcies continued to be much lower than other closing types, at 39 compared with 40 in 2014

Kering’s 2015 Revenue +15%

Luxury group Kering reported revenue jumped 15% to $12.89 billion (EUR 11.58 billion) in 2015 on “brisk” sales and an improved operating performance. The increase was 4.6% on a comparable basis. Profit surged 32% to $774.7 million.

Watches and jewelry accounted for 10% of total revenues, the retailer said. Sales in the company’s jewelry brands “rose sharply” amid “very high” business volumes in the fourth quarter, but the watch business was hit by unfavorable market conditions.

MINING 	  

Dominion’s 4Q Sales -26%

Dominion Diamond Corporation reported sales slid 26% year on year to $178.1 million in the fourth quarter that ended January 31.

Prices at the miner’s January diamond sale were cut 5%. However, a shortage of rough in cutting centers resulted in rises in some areas of rough pricing at its tender in India in early February, the company said.

Lucaras 4Q Revenue Declines

Lucara Diamond Corp. reported revenue declined 7.5% year on year to $65.2 million in the fourth quarter that ended December 31 as the diamond market “experienced some weakening” during the year.

The miner nonetheless turned a $19 million profit, following a loss of $16.8 million a year before on the back of a $21.1 million impairment and restoration charge. The average price per carat sold increased from $675 to $693 per carat. Production from the company’s Karowe mine in Botswana dived 22% to 89,247 carats.

Petra Swings to $2M Loss

Petra Diamonds swung to a loss of $2.2 million in the first half that ended December 31 from a profit of $39.1 million a year earlier as rough prices dropped.

Prices achieved by the miner dropped about 20% over the last 18 months, Petra chief executive officer Johan Dippenaar said in a presentation to investors. Average tender prices at three of its four South African mines were lower in the last six months of 2016 compared with the twelve months to June 30. Prices at the Williamson mine in Tanzania increased if exceptional diamonds are taken into account, but decreased without them.

Gemfields’ 1H Revenue, Profit Fall

Gemfields reported revenue dropped 9.1% year on year to $94 million in the first half that ended December 31. Profit after tax dived 65% to $8.2 million.

Emerald and beryl production from the Kagem mine in Zambia surged 30% to 15.7 million carats. Production of ruby and corundum from the Montepuez mine in Mozambique, however, dived 67% to 2.1 million carats.

Miner Plans to Sue Zimbabwe over Marange Ban

The Diamond Mining Company (DMC), one of the companies ordered to stop operations in Zimbabwe’s Marange fields by the government, plans to sue the nation’s administration for alleged breach of contract, Reuters reported.

Mines and Mining Development Minister Walter Chidakwa told diamond miners in the country February 22 to cease excavation because their licenses had expired.

Ramzi Malik, DMC’s general manager, said the firm’s joint venture with the state-owned Zimbabwe Mining Development Corporation (ZMDC) stipulates that renewing licenses was the government’s responsibility, according to Reuters.

GENERAL 	  

AGS to Honor Jewelry Figures

The American Gem Society (AGS) will honor three figures in the jewelry industry for their contributions to the jewelry industry at its annual Circle of Distinction dinner on July 26 at the Plaza Hotel in New York.

Dione Kenyon (pictured), president of the Jewelers Board of Trade (JBT), will receive the Lifetime Achievement Award. Stewart Wicht, chief executive officer and president of Rolex Watch U.S.A., and Hank Siegel, president of Hamilton Jewelers, will both be awarded the AGS Triple Zero Award.

Israeli Pavilion at HKTDC to Host 93 Companies

The Israel Diamond Pavilion at the HKTDC Hong Kong International Diamond, Gem & Pearl Show this March will host 93 companies, the Israel Diamond Institute Group of Companies (IDI) announced.

There will be an additional 10 Israeli exhibitors in other locations of the show, which runs March 1 to 5. Six Israeli companies will be exhibiting at the fair for the first time.

ECONWATCH 	  

Diamond Industry Stock Report

European and Far East retail stocks suffered this week, led by Damiani (-13%), while U.S. retailers were mixed, with Birks Group (+9.1%) heading the gains and Signet (-7%) experiencing the biggest drop. Mining stocks were generally positive as rough demand was firm in February, led by Stellar Diamonds (+23%) and Firestone Diamonds (+13%).

View the detailed industry stock report.
Feb. 25 (12:00 GMT) Feb. 18 (12:25 GMT) Chng.
$1 = Euro 0.91 0.90 0.006
$1 = Rupee 68.82 68.50 0.3
$1 = Israel Shekel 3.90 3.90 0.00
$1 = Rand 15.53 15.39 0.14
$1 = Canadian Dollar 1.36 1.37 0.00

Precious Metals Chng.
Gold $1,232.45 $1,205.47 $26.98 2.2%
Platinum $934.50 $941.00 -$6.50 -0.7%
Silver $15.18 $15.27 -$0.09 -0.6%

Stock Indexes Chng.
BSE 22,976.00 23,649.22 -673.22 -2.8%
Dow Jones 16,484.99 16,453.83 31.16 0.2%
FTSE 6,000.13 6,015.41 -15.28 -0.3%
Hang Seng 18,888.75 19,363.08 -474.33 -2.4%
S&P 500 1,929.80 1,926.82 2.98 0.2%
Yahoo! Jewelry 1,042.09 1,071.27 -29.18 -2.7%

Rapaport Weekly Market Comment March 3, 2016

Hong Kong show opens to steady traffic and improving dealer demand. Far East jewelry consumption still uncertain. Large quantity of goods available at the show but shortages of better-quality RapSpec A2 diamonds supporting selection prices. Feb. 1ct. RAPI +0.3%. Rough market firm as De Beers sells $610M in Feb. vs. $545M in Jan. ALROSA Jan./Feb. sales at $780M. Lucapa sells 404ct., type IIa, D, rough diamond for $16M ($39,604/ct.). Sarine 4Q revenue -32% to $12M, profit -62% to $2M. Hong Kong 2015 polished imports -11% to $17.5B, polished exports -3% to $13.3B. Signet 4Q same-store sales +5%, earnings per share +19%. Stuller launches synthetic diamond sales.

RapNet Data: March 3

Diamonds 1,138,515
Value $7,981,305,719
Carats 1,258,438
Average Discount -27.92%

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
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
Mar-Apr 29-6 Tue-Wed

Rapaport Melee Auction

New York & Dubai

View Detail

QUOTE OF THE WEEK
We want to give jewelers every option they need to thrive and many of our customers already offer these diamonds with great success.

• Stanley Zale, vice president of diamonds and gemstones at Stuller, on the jewelry manufacturer introducing lab-grown diamonds to its product offering.

  MARKETS

United States: Steady demand and firm prices. U.S. dealers eyeing price trends at the ongoing Hong Kong International Jewelry Show. Bold red carpet display of diamonds at Hollywood Oscar ceremony...

Belgium: Positive sentiment after dealers registered steady U.S. sales in Feb. Dealers traveled to Hong Kong show hoping the momentum would continue but uncertain about Far East demand...

Israel: Polished trading quiet with large delegation of dealers at Hong Kong show. Good demand and shortage of better-quality RapSpec A2 diamonds. Buyers insisting on 3X...

India: Trading is quiet. Dealers sent their goods to the Hong Kong show even if they weren’t exhibiting leaving little inventory available in Mumbai. Rough demand steady during De Beers sight and ALROSA sale with some shortfalls in De Beers supply...

Hong Kong: Focus on the show. Suppliers note steady traffic during first two days of diamond exhibit with steady dealer demand. Positive sentiment and dealers are active as they held off from trading in the weeks before the show...

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INDUSTRY 	  

Polished Diamond Prices Firm in February

Polished diamond prices rose in February continuing the uptrend evident since November. Shortages continue to support the market while trading slowed during the month as dealers in China and Hong Kong took vacation during the Chinese New Year period.

The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rose 0.3% in February. RAPI for 0.30-carat diamonds advanced 0.4% and RAPI for 0.50-carat diamonds grew 0.7%. RAPI for 3-carat diamonds fell 1.2%.

RAPI for 1-carat diamonds increased 1.3% during the first two months of the year but remains 7.8% below levels recorded one year ago.

Steady Activity at Hong Kong Show

Diamond exhibitors were satisfied with activity during the opening days of the Hong Kong show noting that visitor traffic was stronger than last year.

Exhibitors observed good dealer demand in the diamond exhibition, while jewelry retailers were also present but more cautious on pricing. Most reported that prices were relatively steady during the event, particularly for pointer-size diamonds up to 1-carat with good demand for sizes 0.30-carat to 0.50-carat and 1- to 2-carat diamonds. One dealer said that shortages were still felt in the 0.30 to 0.50-carat category, while there was larger inventory available at the show in 1-carat and larger sizes.

In general, dealers that spoke with Rapaport News said the show had not been a game-changer, but that the market was operating in a measured manner.

De Beers February Sales Rise to $610M

De Beers reported rough diamond sales increased to $610 million in the second cycle of 2016 as demand continued to improve. Sales in the first cycle in January were revised to $545 million.

The sales figure includes the sight in Gaborone, Botswana, which took place February 22 to 26, as well as auction sales and supply to beneficiation and government partners.

De Beers sightholders told Rapaport News the miner sold all the goods it made available and kept prices stable.

ALROSA Sells $780M of Rough in Jan-Feb.

ALROSA sold about $780 million worth of rough diamonds during its first two sales of the year as rough demand improved, a market source told Rapaport News. Prices in February were unchanged for the sixth month running, according to Rapaport records.

The Russia-based miner allowed its clients to reject up to 30% of goods at the latest tender without forcing them to pay a penalty or commit to buying the stones in the future, the source said. In January the rejection limit was 50%.

Separately, Russia is considering privatizing a 10.9% stake in ALROSA, press agency TASS reported, citing the nations finance minister.The state owns 44% of the miner.

Hong Kongs 2015 Polished Imports -11%

Hong Kongs polished diamond imports declined 11% to $17.52 billion in 2015, according to data from the Diamond Federation of Hong Kong. In volume terms, polished imports fell 12% to 18.6 million carats.

Polished imports from India, Hong Kongs biggest diamond trade partner, fell 13% to $7.22 billion compared with the previous year. Imports from Israel slumped 23%, while shipments from the U.S. slid 12%.

Sarines 4Q Revenue -32%, Profit -62%

Sarine Technologies reported revenue slumped 32% to $12.4 million in the fourth quarter that ended December 31 as diamond manufacturing levels fell.

Profit dived 62% year on year to $1.5 million during the period, according to the Singapore-listed company, which makes technological products for diamond and gemstone production.

Stuller Embraces Lab-Grown Diamonds

Jewelry manufacturer Stuller added lab-grown diamonds to its repertoire of gems used in its products. Its synthetic stones will be housed in a separate vault from its natural diamonds and stored and shipped in a distinct blue acrylic box and always handed separately.

All grown in the U.S., the diamonds will be accompanied by a certificate from the Gem Certification and Assurance Lab (GCAL) and have a unique inscription on the girdle and a distinctly labeled package.

RETAIL & WHOLESALE 	  

U.S. Jewelry, Watch Sales Increase Again

U.S. jewelry and watch sales from all retail outlets increased 6.3% year on year to an estimated $4.65 billion in January, with both categories enjoying nine successive months of growth, according to provisional figures from the Bureau of Economic Analysis.
Jewelry sales in January increased 6.3% year on year to $4.11 billion, according to Rapaport News estimates while watch sales rose 6.4% to an estimated $544 million.

Signets 4Q Same-Store Sales +5%

Signet Jewelers same-store sales increased 4.9% in the fourth quarter that ended January 30, according to preliminary results.

The improvement is within the diamond jewelry retailer’s guidance of 4.6 to 5% same-stores sales growth and comes alongside an increased in adjusted earnings per share of 19% to $3.63, the company said.

Sothebys 2015 Revenue Climbs

Sothebys reported revenue increased 2.5% to $961.5 million in 2015. However, profit dived 63% to $43.7 million because of a number of charges recorded in the year.

The auctioneer sold $571.4 million worth of jewelry in 2015, below a record of $602.5 million set the previous year.

Berkshire Hathaways Retail Revenue Jumps

Berkshire Hathaway reported retail revenue increased by about $8.8 billion in 2015 on the back of acquisitions of the Van Tuyl Group and Detlev Louis Motorrad. The two businesses together contributed $8.3 billion of revenue.

The holding company did not provide a total revenue figure for the segment, which includes jewelry groups Ben Bridge Jeweler, Borsheims and Helzberg Diamonds.

Kohls to Shut 18 Stores

Kohls Corporation will close 18 underperforming stores in 2016 as fourth-quarter sales growth fell below expectations and profit dived.

Revenue grew 0.8% year on year to $6.39 billion in the three months to January 30. Profit fell 20% to $296 million, the U.S.-based retailer said.

Indias Shrenuj Sales Slump 34%

India-based diamond manufacturer Shrenuj & Company reported revenue slumped 34% year on year to $182.8 million (INR 12.34 billion) in the three months that ended December 31. The company swung to a loss of $55,103 from a profit of $3 million a year before. Diamond sales dived 30% to $153.3 million in the third fiscal quarter.

Frederick Goldman Makes Costa Rica Acquisition

Jewelry manufacturer Frederick Goldman has bought "selected assets" of Costa Rica-based bridal jewelry company Joyeros Costarricenses.

Joyeros Costarricenses has manufactured and distributed bridal products in North America for over 25 years and has already been servicing many Frederick Goldman clients, the U.S.-based acquirer said.

MINING 	  

Angolas Largest Diamond Sold for $16M

Lucapa Diamond Company sold the record-breaking 404-carat diamond it recovered earlier this month in Angola for $16 million (AUD 22.5 million).

The selling price of $39,580 per carat is the highest to date for a white diamond mined at the Lulo Diamond Project in the African nation. The type-IIa, D-color gem was the largest recorded diamond ever found in Angola.

ALROSAs Diamond Reserves Jump to 1.1B Carats

ALROSAs diamond reserves at the start of 2016 increased by 43.6 million carats to 1.11 billion carats by Russian state classification standards, the miner reported.

The bulk of the companys geological exploration in 2015 was carried out in the Yakutia region of Russia. Total financing of exploration came to $82.8 million (RUB 6.3 billion), of which about $80.2 million was allocated to operations in Yakutia.

Diamcors Quarterly Sales Soar

Diamcors revenue nearly doubled in the three months that ended December 31 as increased processing and facility upgrades at the Krone-Endora at Venetia project in South Africa helped the miner boost the volume of diamonds it recovered and sold.

The miners rough sales surged 95% year on year to $1.3 million (AUD 1.7 million) in its third fiscal quarter, it said. Diamonds sold by volume jumped to 9,469 carats compared with 3,579 carats a year earlier.

Kimberley Secures Loan for Lerala Mine

Kimberley Diamonds has secured financing to bring the Lerala Diamond Mine in Botswana to production, with mining scheduled to start in March this year. Diamond production is anticipated in April and the first sale in June.

The miner announced a $2.8 million working capital loan facility, which complements a rights issues planned for March to April that is expected to raise $2.9 million (AUD 4 million).

Court Gives Mbada Diamonds Access to Marange Assets

A Zimbabwe court has granted Mbada Diamonds the right to take control of its assets in the Marange fields after the miner was forced to cease operations. The government recently ordered companies to stop mining after it did not renew their licenses, with the state-owned Zimbabwe Consolidated Diamond Company taking over excavation.

Mbada appealed the decision and won a reprieve from the High Court on February 29, Reuters reported. The court ordered Mines and Mining Development Minister Walter Chidakwa allow Mdabas security staff access to the company’s mining site in Marange. A full hearing on whether Mbada can resume mining was scheduled for later this week.

DiamondCorp Raises Price Forecast for Lace Mine

DiamondCorp raised its forecast for the average price it expects to achieve from production at the Lace Mine from $160 to $164 per carat. The price does not include values from the potential recovery of special stones, for which the South Africa-located mine was renowned during its previous production period in the early twentieth century.
The company also revised its estimated reserve at the mine to 9.4 million carats of diamonds with a bottom screen size of 1.25 millimeters. A previous 2012 report estimated a resource of 13.4 million carats at a 1-millimeter screen size

GENERAL 	 

FTC Extends Deadline for Jewelry Guides Changes

The Federal Trade Commission (FTC) has extended the deadline to file comments about changes to its Jewelry Guides to June 3, the Jewelers Vigilance Committee (JVC) reported. JVC had requested the extension from the original April 4 cutoff. The FTCs Jewelry Guides outlines how businesses should avoid making deceptive claims about precious metal, pewter, diamond, gemstone, and pearl products, including what types of disclosures are needed, the commission explained. JVC noted that numerous trade associations and hundreds of industry members have filed comments and suggested changes since the review began in 2012.

JA Adds New Member Perks

Jewelers of America has announce new benefits for members including competitive rates on financial services from Jewelry Asset Services, a bank loan and inventory lending consulting company.

In addition, members will now be able to save on services and templates from W.R. Cobb Online, a specialist in jewelry industry technologies and marketing solutions. A further new benefit is access to competitive workers’ compensation coverage through Wasserman & Wexler and affiliated agencies.

ECONWATCH 	  

Diamond Industry Stock Report

View the detailed industry stock report.
Mar. 3 (10:30 GMT) Feb. 25 (12:00 GMT) Chng.
$1 = Euro 0.92 0.91 0.01
$1 = Rupee 67.34 68.82 -1.5
$1 = Israel Shekel 3.89 3.90 -0.01
$1 = Rand 15.68 15.53 0.14
$1 = Canadian Dollar 1.34 1.36 -0.02

Precious Metals Chng.
Gold $1,242.12 $1,232.45 $9.67 0.8%
Platinum $937.50 $934.50 $3.00 0.3%
Silver $14.95 $15.18 -$0.23 -1.5%

Stock Indexes Chng.
BSE 24,606.99 22,976.00 1,630.99 7.1%
Dow Jones 16,899.32 16,484.99 414.33 2.5%
FTSE 6,158.69 6,000.13 158.56 2.6%
Hang Seng 19,941.76 18,888.75 1,053.01 5.6%
S&P 500 1,986.45 1,929.80 56.65 2.9%
Yahoo! Jewelry 1,091.68 1,042.09 49.59 4.8%

Rapaport Weekly Market Comment March 10, 2016

Hong Kong show exceeds low diamond dealer expectations but slow for jewelry fueling caution about Chinese consumer demand. Positive mood in the diamond section with suppliers feeling better about the market. Dealer and manufacturer profitability improving with new lower-cost polished supply, but old stock is difficult to sell and expensive. Good demand for 0.30-1.99ct., G-J, VS-SI diamonds. 3ct. weak. Indian jewelers strike against 1% excise duty imposed by government. Belgium’s Feb. polished exports -10% to $1.6B, rough imports +28% to $1.3B.

RapNet Data: March 10

Diamonds 1,105,398
Value $7,771,583,301
Carats 1,227,939
Average Discount -28.33%

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
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 Mar-Apr 29-6 Tue-Wed

Rapaport Melee Auction

New York & Dubai

View Details
April 13-16 Wed-Sat

AGS Conclave

Washington, DC, USA

View Details

QUOTE OF THE WEEK
The excise guidelines which have been drafted for gems and jewelry are not practically implementable and will be detrimental to the survival of the industry.

G. V. Sreedhar, chairman of the All India Gems and Jewellery Trade Federation, on the government’s new 1% excise duty on jewelry

MARKETS 	  

United States: Trading is relatively slow. Buyers are looking for deals to fill shortages, while suppliers are trying to hold prices firm. No real urgency in the market. Shortage of nice, eye-clean SI’s...

Belgium: Polished market stable as dealers and goods return from the Hong Kong show. Mixed reports from the Antwerp pavilion at the show...

Israel: Positive sentiment as dealers return from Hong Kong show. Good demand for 0.30-1.5ct., D-H, VS-SI diamonds. Suppliers holding prices firm. 3ct weak with mixed reports about larger stone market...

India: Trading slow in Mumbai. Dealers satisfied with the show and noted that profitability is improving as new lower-cost polished becomes available. Old stock expensive and difficult to sell...

Hong Kong: Diamond trading positive at last week’s Hong Kong show (March 1 to 7), while activity was quieter in the jewelry section. Steady dealer demand and improving sentiment in the local market...

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INSIGHTS 	  

Short-Term Diamond Markets

The Hong Kong show that ended March 7 revealed a diamond industry that is focused on the very short term. Dealers who spoke with Rapaport News were relatively upbeat about the exhibition, but uncertain of market developments in two-to-three months…

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INDUSTRY 	 

Participation Grows at Hong Kong Shows

Foot traffic at the two Hong Kong exhibitions held March 1 to 7 increased from a year ago as more than 80,000 buyers attended the key fixtures on the jewelry trade calendar, according to the organizers. Last year more than 76,000 buyers attended the shows.

More than 31,000 buyers visited the Diamond, Gem & Pearl Show at AsiaWorld-Expo from March 1 to 5, while more than 49,000 visitors attended the Jewellery Show at the Hong Kong Convention and Exhibition Centre from March 3 to 7.

DPA Marketing Chief to Leave

Sally Morrison (pictured), managing director of marketing for the Diamond Producers Association (DPA), will leave the organization in May to “pursue another professional opportunity.”

Michael Pace, the former head of global marketing at the World Gold Council, will become interim managing director of marketing at the end of March to “ensure continuity of momentum,” until a permanent replacement for Morrison is found.

Belgium’s February Polished Exports -10%

Belgium’s polished diamond exports dropped 9.6% year on year to $1.6 billion in February, according to the Antwerp World Diamond Centre (AWDC). By volume, exports dived 16% to 615,837 carats, while the average price jumped 7.3% to $2,592 per carat.

Compared with the previous month, polished shipments were higher in February as goods were exported to Hong Kong for the March show, implying the spike was seasonality-driven. Exports to the key trading center soared almost fivefold to $684.1 million sequentially in February, but slumped 17% year on year.

Botswana’s January Exports -27%

Botswana’s diamond exports in dollar terms dived 27% to $222.5 million in January, according to data from the Bank of Botswana.

The drop – 14% when calculated in terms of the local currency pula – comes off the back of a downbeat environment in the rough market in December, when De Beers said it sold $248 million, compared with an estimated $577 million a year earlier. De Beers sales in January this year jumped to $540 million.

India Strike ‘Costing Jewelers $150M per Day’

A jewelers’ strike in India protesting a new 1% excise tax is causing industry members to lose $150 million per day, Bloomberg reported, citing the All India Gems & Jewellery Trade Federation (GJF).

The industrial action, which started March 2, is supported by the GJF. The organization said the strike would continue “until further notice.”

Okavango to Hold Rough Viewings in Mumbai in July

Okavango Diamond Company (ODC) will hold viewings of its rough stones at the Bharat Diamond Bourse in Mumbai July 20 to 25. These will take place alongside the company’s regular viewings in Gaborone, Botswana.

The goods will be available for ODC-registered customers to view. Those who are not registered are invited to apply on the company’s website.

WFDB to Launch-Know-Your Customer Program in May

The World Federation of Diamond Bourses (WFDB) will launch its Know-Your-Customer initiative in May, aimed at increasing transparency in the industry to banks and regulators.

The announcement was made at the WFDB’s Asia Summit held in Seoul, where presidents of exchanges were hosted by the Korea Diamond Bourse.

RETAIL & WHOLESALE 	  

Christie’s to Auction Joan Rivers’ Jewelry

Christie’s will auction personal pieces from the late entertainer Joan Rivers’ New York penthouse in June, including jewelry designed by Cartier, Van Cleef & Arpels and Harry Winston.

Items including decorative arts, paintings, fine French furniture and Fabergé will be auctioned in the U.S. city in June 22, while a separate online auction running June 16 to 23 will feature fashion and jewelry.

Moissanite Maker Aims to Compete with Diamonds

Charles & Colvard, the world’s primary maker and seller of moissanite, a diamond substitute, reported revenue grew 20% to $30.8 million in 2015 as ecommerce sales soared.

The company plans to “move up-market and compete directly with diamonds for market share,” said Suzanne Miglucci, Charles & Colvard’s president and chief executive officer.

Signet, Tiffany Fight Wildlife Trafficking

Signet Jewelers and Tiffany & Co. are among jewelry industry players committing to help stop wildlife trafficking activities in the U.S. through a new agreement among corporations in the country.

Berkshire Hathaway companies Richline Group and Rio Grande are also members of the U.S. Wildlife Trafficking Alliance, a coalition of companies and non-governmental organizations formed in response to the government’s National Strategy for Combatting Wildlife Trafficking.

MINING 	  

Mugabe Attacks Zimbabwe’s Diamond Firms

Zimbabwe’s President Robert Mugabe said illicit trade in the nation’s diamonds has cost its economy more than $13 billion as companies have “robbed” the country of its wealth, Bloomberg reported.

This forced the state to create a new company, Zimbabwe Consolidated Diamond Co., which will take over mining in the African nation, the news agency reported, citing an interview Mugabe gave on state television. Miners active in the country were last month forced to cease operations after the government did not renew their licenses.

Diavik Mine Reserves Decrease to 53M Carats

Dominion Diamond Corporation reported proven and probable mineral reserves at the Diavik Diamond Mine in Canada declined to 52.8 million carats on a 100% basis at the end of last year, a reduction of 500,000 on an annual basis.

The biggest proportion of the reserves were in underground mines, which had proven and probable reserves of 42.6 million carats.

Lucapa Sells Nearly $7M of Lulo Diamonds

Lucapa Diamond Company and local Angolan partner Roses & Petalas sold a further 1,349 carats of diamonds from the Lulo Diamond Project in Angola for gross proceeds of $6.8 million (AUD 9.6 million). The average selling price was $5,075 per carat.

Including the sale of a record 404-carat diamond for $16 million, gross revenues from 1,931 carats of Lulo diamonds have amounted to $24.2 million in the quarter ending March 2016.

Diamcor Reports Krone-Endora Sales

Diamcor Mining reported it sold 6,897 carats of rough diamonds from its Krone-Endora at Venetia project in South Africa for a total of $1 million from two tenders held since the start of 2016. The average price achieved was $149.12 per carat.

The sales total – which covers all the tenders scheduled for the current fiscal quarter ending March 31 – represents an increase of about 49% by volume and 22% by value from a year ago.

GENERAL 	  

Crimes Against U.S. Jewelers Slump

The total number of crimes committed against U.S. jewelry firms that were reported to the Jewelers’ Security Alliance (JSA) slumped last year, leading to an 11% drop in dollar losses.

Crimes reported fell by 15% to 1,177 in 2015 as authorities were successful in catching lawbreakers, according to the latest data. Total dollar losses fell to $77.8 million and the number of jewelers killed in crimes against jewelry firms fell from three to two.

Hatton Garden Thieves Jailed

Five gang members have been handed jail sentences ranging from six to seven years for their roles in the $19.9 million (GBP 14 million) burglary of jewelry from the Hatton Garden security vault in London’s diamond district, The Guardian reported.

The heist, described by prosecutor Philip Evans as the biggest burglary in English history, took place over the Easter holiday weekend in April 2015.

Jewelry Industry Summit Sells Out

The Jewelry Industry Summit, an open forum on sustainability and responsible sourcing, taking place in New York from March 11 to 13 is sold out, its organizers said.

The summit, to be held at the Fashion Institute of Technology, will be an interactive working meeting with large and small discussion groups rather than a full agenda of speakers.

ECONWATCH 	  

Diamond Industry Stock Report

Birks Groups share price soared 61% from a relatively low base this past week as U.S. retail stocks generally saw modest or large increases. Charles & Colvard gained 13.5% on strong results. Mining stocks mostly lost value, headed by Gem Diamonds (-9.9%), but Peregrine Diamonds (+15%) led those bucking the trend. Far East and India stocks were mixed.

View the detailed industry stock report.
Mar. 10 (12:30 GMT) Mar. 3 (10:30 GMT) Chng.
$1 = Euro 0.91 0.92 -0.01
$1 = Rupee 67.03 67.34 -0.3
$1 = Israel Shekel 3.90 3.89 0.00
$1 = Rand 15.20 15.68 -0.47
$1 = Canadian Dollar 1.33 1.34 -0.02

Precious Metals Chng.
Gold $1,248.28 $1,242.12 $6.16 0.5%
Platinum $976.35 $937.50 $38.85 4.1%
Silver $15.28 $14.95 $0.33 2.2%

Stock Indexes Chng.
BSE 24,623.34 24,606.99 16.35 0.1%
Dow Jones 17,000.36 16,899.32 101.04 0.6%
FTSE 6,145.12 6,158.69 -13.57 -0.2%
Hang Seng 19,984.42 19,941.76 42.66 0.2%
S&P 500 1,989.26 1,986.45 2.81 0.1%
Yahoo! Jewelry 1,078.75 1,091.68 -12.93 -1.2%

Rapaport Weekly Market Comment March 17, 2016

Big-stone demand uncertain as Basel show opens. Finest cut large diamonds in short supply and selling but lower qualities weak. Rough auction prices too high and trading cooling off as polished production increases. ALROSA 2015 revenue +8% to $3.3B, profit of $471M vs. loss of $246M in 2014. Gem Diamonds 2015 revenue -8% to $271M, profit +57% to $52M. China’s 2015 polished imports -14% to $6.7B, exports -21% to $2.2B. U.S. Jan. polished imports -3% to $1.8B, exports -9% to $1.3B. India’s Feb. polished exports +2% to $2.3B, rough imports +37% to $1.6B. Sotheby’s to auction Lucara’s 1,111ct. Lesedi La Rona rough diamond. De Beers launches U.S. diamond reselling business.

RapNet Data: March 17

Diamonds 1,133,311
Value $7,890,644,475
Carats 1,250,774
Average Discount -27.94%

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
In Beijing alone there are a couple of hundred billionaires. We’re nearly run over in the rush of people trying to find [large diamond. I’m pretty confident we’re nowhere near saturation point or anything that’s going to have an effect on prices.

Clifford Elphick, CEO of Gem Diamonds, predicts demand for exceptional diamonds will remain strong

MARKETS 	 

United States: Polished trading steady. Large-volume suppliers find it difficult to replace inventory with shortages of the right goods...

Belgium: Mixed sentiment in Antwerp. Steady demand and tight supply for top-quality RapSpec A2 diamonds. Lower qualities difficult to sell and stuck in inventory...

Israel: Improved sentiment after Hong Kong show but trading relatively quiet. Suppliers holding back on goods and using memo to sell to end consumers where they can get better prices than on the dealer market...

India: Polished trading quiet and activity slowed after Hong Kong show. Suppliers left with large inventory of lower-quality goods that are difficult to sell...

Hong Kong: Trading steady and sentiment improving. Last week’s show provided momentum to the market. Stable demand for 0.30-1ct., G-J, VS-SI diamonds...

Click here to continue reading

INDUSTRY 	  

Sotheby’s to Auction 1,111-Ct Rough Diamond

Lucara Diamond Corp has appointed Sotheby’s to auction the world’s second-largest diamond it discovered in Botswana last year.

"We are very excited to have been chosen to work with Lucara on this extraordinary project," Sothebys said in a statement to Rapaport News. "Such a sale is unprecedented so we are together exploring the best possible way to present this natural treasure to the market."

Lucara intends to sell the 1,111-carat Lesedi La Rona in the first half after a roadshow that will take the stone to undisclosed locations around the world.

Indian Diamantaires Join Jewelers’ Strike

Members of the diamond industry went on strike March 17 in support of the wider shutdown among jewelers protesting a new 1% excise duty.

In a note to members of the Mumbai Diamond Merchants’ Association, its president, Bharat Shah, said the trade body and the Diamond Exports Association had asked all those in the diamond and diamond-studded jewelry industry to down tools in support of the cause. Jewelers held a rally in New Delhi the same day to urge the government to cancel the duty.

U.S. Polished Imports -3% in January

U.S. polished diamond imports fell 3.2% year on year to $1.77 billion in January, according to provisional government data. Diamond imports by volume declined 14% to 912,672 carats. The average price of polished imports, however, increased 12% to $1,938 per carat.

Polished diamond exports, meanwhile, dropped 8.9% to $1.26 billion, driving net imports up 15% to $513 million.

Rapaport Hong Kong Auction Sells Over 80K Cts

Rapaport Auctions sold 80,000 carats for $12 million at its auction last week in Hong Kong.

The auction consisted of hundreds of parcels of recycled and finely assorted premium quality diamond parcels in all shapes, qualities and sizes. The diamonds were sourced from retailers, pawnshops and refineries from around the world.

CAR Deal Opens Door to KP Return

The Central African Republic (CAR) will soon resume exporting diamonds after a deal was struck between its government and the country’s main miner, Sodiam, The National reported.

CAR has been unable to export diamonds since 2013, when it was suspended from the Kimberley Process (KP) on concern that a rebel group was using the gems to fund illegal activities.

The deal between CAR’s minister for mines, Joseph Agbo, and Viken Arslanian, an executive of Sodiam, followed meetings chaired by Ahmed Bin Sulayem, chairman of the KP for 2016, the UAE newspaper reported.

Dallas Diamond Firms to Launch Cutting Facility

Dallas-based The Diamond Doctor and Southwest Diamond Cutters have joined forces to open a “state-of-the-art” cutting facility.

The Diamond Doctor, a jewelry wholesaler and retailer, and Southwest Diamond Cutters, a firm owned by a fifth-generation master diamond cutter, will launch the facility in Farmers Branch housing 14 diamond cutters and support staff. Employees are slated to start in mid-2016.

India’s Polished Exports +2% in February

India’s polished diamond exports increased 1.9% year on year to $2.34 billion in February, according to the nation’s Gem & Jewellery Export Promotion Council.

By volume, polished exports increased 8.2% to 3.3 million carats. Polished imports dived 45% to $222.1 million, leaving net polished exports up 12% to $2.12 billion.

Rough diamond imports surged 37% to $1.55 billion and rough exports soared 49% to $131.8 million.

RETAIL & WHOLESALE 	  

De Beers Rolls Out Diamond Reselling Business in U.S.

De Beers launched its diamond reselling business in the U.S. after an 18-month pilot program. The company claimed it is targeting both retailers and consumers by offering better prices and greater transparency.

The International Institute of Diamond Valuation (IIDV) will provide customers with “more accurate and attractive” prices and give retailers a service that complements their own activities, helping to maintain customer relationships and support repeat business, De Beers said.

Oval Blue Diamond Expected to Fetch up to $35M

Sotheby’s hopes to raise $30 million to $35 million (HKD 235 million to HKD 280 million) from the sale of the largest oval fancy vivid blue diamond ever to appear at an auction.

The “rare and superb,” 10.10-carat stone, known as the ‘De Beers Millennium Jewel 4,’ is internally flawless and will appear at the Magnificent Jewels and Jadeite Spring Sale in Hong Kong on April 5.

U.S. Jewelry Store Sales +1% in January

U.S. specialty jewelry store sales rose 1.2% year on year to $1.8 billion in January, according to the U.S. Census Bureau. The increase compares with the 6.3% jump in jewelry sales across all retail outlets that month.

Adjusted for seasonality, jewelry store sales in January increased 4.2% to $2.57 billion.

MINING 	  

ALROSAs Revenue +8% in 2015

ALROSA reported revenue jumped 8.4% to $3.28 billion (RUB 224.5 billion) last year as the rouble’s depreciation against the dollar boosted the Russian miner’s sales in local currency.

As a result, the company swung to a profit of $470.9 million from a loss of $246.2 million in a year ago, overcoming a 24 percent slide in the volume of diamonds sales. The value of diamond sales increased 9.3 percent to $2.94 billion.

De Beers Diamond Reserves +28%

De Beers diamond reserves were raised by 28% last year as the miner increased its resource estimate for two mines in Botswana.

Reserves were increased to 479.7 million carats as at December 31, compared with 375.4 million carats a year earlier, according to parent company Anglo American’s annual report.

The report shows the overall increase of just over 100 million carats is almost entirely attributed to a 28% rise in reserves at Debswana, De Beers joint venture with the government of Botswana, which advanced to 313.8 million carats from 212 million carats a year before.

Gem Diamonds’ 2015 Revenue -8%

Gem Diamonds reported revenue dropped 8% to $249.5 million in 2015 as the average price of gems from the Letšeng mine in Lesotho slumped and rough carat sales slid.

The average price at Letšeng fell 9% and rough sales by volume were down 6%. Attributable profit for the year nonetheless jumped 57% as the miner cut costs. The company also said it will downsize its operations at the Ghaghoo mine in Botswana.

Gahcho Kué Mine Set for 2H Production Start

Mountain Province Diamonds reported the Gahcho Kué diamond mine in Canada’s Northwest Territories is on track for first production in the second half of 2016, with the project now more than 87% complete.

Mountain Province is a 49% participant in the mine together with De Beers Canada. Development is progressing according to plan, Mountain Province said.

GENERAL 	  

IGI North America Airs TV Ads

International Gemological Institute (IGI) North America launched a national advertising campaign on U.S. cable television to increase consumer awareness about and confidence in the diamond and fine-jewelry industry.

The advertisements started airing on Fox News, MSNBC, CNBC, CNN, HLN and Time Warner Cable NY1 News from March 14.

Barbie Diamond Shoes and Ring up for Auction

Sotheby’s will auction a set of Barbie diamond shoes and ring made at its Magnificent Jewels sale on April 19 to mark the 57th anniversary of the doll’s launch.

The set comprises platinum and diamond slippers and a 3.73-carat diamond ring, Sothebys said in a post on the social network site Insite.

ECONWATCH 	  

Diamond Industry Stock Report

Indian jewelry stocks mainly declined this past week, led by Rajesh Exports (-16%), as the industry held a large-scale strike to protest a new 1% excise tax. In the U.S., several retail stocks lost value, led by Blue Nile (-3.8%) and Movado Group (-3.8%), but Charles & Colvard (+40%) bucked the trend. Declines among European retailers were steeper, headed by Swatch Group (-8.5%) and Richemont (-6.7%). Mining stocks were mixed.

View the detailed industry stock report.
Mar. 17 (12:20 GMT) Mar. 10 (12:30 GMT) Chng.
$1 = Euro 0.89 0.91 -0.03
$1 = Rupee 66.67 67.03 -0.4
$1 = Israel Shekel 3.85 3.90 -0.05
$1 = Rand 15.39 15.20 0.19
$1 = Canadian Dollar 1.30 1.33 -0.02

Precious Metals Chng.
Gold $1,266.98 $1,248.28 $18.70 1.5%
Platinum $981.75 $976.35 $5.40 0.6%
Silver $15.68 $15.28 $0.40 2.6%

Stock Indexes Chng.
BSE 24,677.37 24,623.34 54.03 0.2%
Dow Jones 17,325.76 17,000.36 325.40 1.9%
FTSE 6,150.68 6,145.12 5.56 0.1%
Hang Seng 20,503.81 19,984.42 519.39 2.6%
S&P 500 2,027.22 1,989.26 37.96 1.9%
Yahoo! Jewelry 1,066.82 1,078.75 -11.93 -1.1%

Rapaport Weekly Market Comment March 24, 2016

Antwerp on high alert after Brussels terror attacks. Light visitor traffic at Basel show reflects cautious European luxury market and weak economic sentiment. Polished inventory rising. New production of more desirable goods selling better than large volume of available old stock. ALROSA keeps rough prices unchanged for sixth straight month. Indian jewelers end 19-day strike with 1% excise duty still in place. Tiffany & Co. 2015 revenue -3% to $4.1B, profit -4% to $464M. Chow Sang Sang 2015 revenue -1% to $2.5B, profit +4% to $146M. Swiss watch Feb. exports -3% to $1.7B. Gem-A appoints Alan Hart as new CEO.

RapNet Data: March 24

Diamonds 1,138,561
Value $7,903,268,172
Carats 1,252,599
Average Discount -28.06%

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 |

Rapaport Single Stone Auction 

QUOTE OF THE WEEK
It’s remarkable to have one stone illustrate the dramatic shift in attitude towards colored diamonds over the course of the last century.

Gary Schuler, co-chairman of Sotheby’s jewelry division for the Americas, on the auction of late entertainer and diplomat Shirley Temples blue diamond ring for an estimated $25 million to $35 million

MARKETS 	 

United States: Wholesale jewelers cautious with political and economic factors impacting sentiment during election year. Polished trading focused on better-quality RapSpec A2 diamonds which are in short supply...

Belgium: Diamond market on high alert after Brussels terror attacks. Access to Antwerp diamond bourses restricted on Tuesday and industry events cancelled...

Israel: Polished trading improving as new production becomes available. Shortage of better-quality RapSpec A2 diamonds and good demand for 0.30-1.99ct., D-H, VS-SI diamonds...

India: Dealers are optimistic as Mumbai trading stabilizes with consistent demand for specific categories. Polished inventory increasing after manufacturers raised production at the beginning of the year...

Hong Kong: Sentiment continues to improve with steady polished trading since March show. Good demand for GIA dossiers and 1ct., D-H, VS-SI diamonds...

Click here for deeper analysis

INDUSTRY 	  

Antwerp on High Alert after Brussels Attacks

Antwerp’s diamond bourses were on high alert since terror attacks in Brussels March 22 that reportedly killed more than 30 people.

Access to the exchanges was restricted but trading continued. Instructions to the Belgian public to stay indoors were lifted 4 p.m. local time Tuesday but the security threat level across the country remained at 4, the highest level, at press time.

“There are no indications whatsoever of a direct threat towards the Antwerp diamond industry,” said Karen Rentmeesters, a spokesperson for the Antwerp World Diamond Centre, adding that the higher security level introduced following attacks in Paris in November has been maintained.

Standard Chartered Seeks to Curb $2B Diamond Exposure

Standard Chartered is demanding its clients in the Indian and Belgian diamond trade get more loan protection in a bid to tighten standards after lending about $2 billion to the industry, Bloomberg reported.

The London-based bank, one of the biggest lenders to the sector’s midstream, is asking diamond manufacturers to get payment insurance or provide 100% collateral, according to the report. Clients that cannot meet the terms may face higher interest charges or will not have their debt facilities renewed, the report said.

China’s 2015 Polished Imports -14%

China’s polished diamond imports declined 14% to $6.69 billion last year as the nation’s economy slowed and consumer sentiment dropped.

The country’s imports of polished fell in each of the first three quarters of 2015 from corresponding periods in the previous year, but picked up slightly in the final quarter, according to data released by the China Customs Information Center.

Indian Government Pledges Leniency on Excise Duty

The Indian government has pledged no arrests or prosecutions will be made in relation to a new tax on the jewelry industry and central excise officers will not visit jewelers until a new committee publishes its opinion on the matter.

Details have emerged of the deal that ended a nationwide jewelers’ strike over the 1% excise duty which saw members of the trade across India down tools for nearly three weeks.

The new sub-committee, chaired by Ashok Lahiri, a former chief economic adviser to the Indian government, will comprise government, customs and industry representatives and will liaise with the trade.

Swiss Watch Exports -3% in February

Swiss watch exports fell 3.3% in February to $1.7 billion (CHF 1.65 billion) as shipments to Hong Kong, the country’s biggest trade partner for timepieces, declined for a 13th consecutive month.

Exports to Hong Kong slumped 25% year on year to $216.8 million. Shipments to China fell 6.8% from a year earlier, while a 22% jump in exports to Japan and a 2.4% increase in outbound shipments to the U.S. supported the industry.

Kimberley Process Clarifies Position on CAR Exports

The office of the Kimberley Process (KP) chair has clarified reports of a deal to resume diamond exports from the Central African Republic (CAR).

Earlier in March, CAR’s minister of mines met with an executive of Sodiam, the country’s largest diamond miner, and agreed to follow a framework set out in July 2015 to gain KP compliance. The meetings were facilitated by KP chair Ahmed Bin Sulayem.

“The outcome was that both groups would abide by what was agreed in Luanda in July 2015 and to request the KP Monitoring Group provide a timetable for the resumption of diamond exports,” said Evgeny Garanin, a spokesperson for Bin Sulayem.

RETAIL & WHOLESALE 	  

Shirley Temple Diamond up for Auction

Sotheby’s expects to sell late entertainer and diplomat Shirley Temples blue diamond ring for $25 million to $35 million.

The cushion-cut, 9.54-carat, fancy deep blue, VVS2 diamond ring will be offered at Sotheby’s Magnificent Jewels auction in New York on April 19. The estimated price translates as up to $3.7 million per carat.

The child star’s father bought the ring for her for $7,210 in 1940 around the time of her 12th birthday and the premier of her film The Blue Bird.

Tiffany’s 2015 Sales Hit by Strong Dollar

Tiffany & Co. missed its own revenue forecast in 2015 as a strong dollar affected translation of non-U.S. sales into the greenback and hit foreign tourist spending in American markets. Macro-economic “challenges and uncertainties” also had a negative impact on sales, the jeweler said.

On a reported basis, worldwide net sales slid 3% to $4.1 billion in 2015, below Tiffany’s guidance of a low-single-digit increase. On a constant exchange-rate basis, revenue rose 2%, given the strength in Asia-Pacific, Japan and Europe.

U.S. Jewelry Prices +3% in February

The U.S. consumer price index (CPI) for jewelry rose 2.9% in February from a month ago, according to the U.S. Bureau of Labor Statistics. The reading was 6.2% higher from last year.

The decline comes as polished diamond prices increased during the month, with the RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rising 0.3%. Gold prices on Comex jumped 9% in February, according to data compiled by Bloomberg.

The February CPI for watches climbed 8.9% from a month earlier and 8.5% year on year.

Chow Sang Sang’s 2015 Sales -1%

Chow Sang Sang reported revenue dipped 1% in 2015 as stronger results from mainland China countered a drop in spending by visitors to Hong Kong amid an economic slowdown.

Group revenue fell to $2.46 billion (HKD 19.07 billion) as jewelry sales in Hong Kong and Macau, the company’s largest market, dropped 10% and same-store sales dived 11%. Total jewelry sales slipped 1% to $2.16 billion.

Christie’s to Auction 16-Carat Ruby and Diamond Ring

Christie’s will auction a ruby and diamond ring for an estimated $12 million to $15 million at its Magnificent Jewels sale in New York on April 20.

The oval-shaped, 15.99-carat Jubilee Ruby within a circular-cut diamond and polished gold surround is signed Verdura. It is the “most important ruby of its caliber to be offered for sale at auction in the U.S. for over twenty five years,” Christie’s said in a note on its website.

Richemont Co-CEO to Leave

Compaignie Financière Richemont announced co-chief executive officer Bernard Fornas will exit his role March 31 and stand down from the luxury group’s senior executive committee and group management committee.

Fornas has served as co-CEO with Richard Lepeu since April 2013 and has been a member of the company’s board of directors since September 2013. He will retain his place on the board as a non-executive director and will serve on its nominations committee.

MINING 	  

ALROSA Keeps Rough Prices Stable

ALROSA held rough prices stable for the sixth month running at its March contract sale as demand for the miner’s goods remained strong.

“ALROSA has not changed the prices for rough diamonds at the March trading session,” a company spokesperson told Rapaport News. “Thus, ALROSA prices remain unchanged since last year.”

The Russia-based miner last adjusted prices in September, when it reduced them by 8 to 10%.

Liqhobong Mine Set for 4Q Production Start

Firestone Diamonds said the Liqhobong Diamond Mine in Lesotho is on track for production to start in the fourth quarter, with plans in place to recover 1 million carats per year.

The project was 68% complete as of the end of February and remains on budget, the diamond development company said. Firestone also reported its loss grew 2.5% year on year to $4.6 million in the six months to December 31.

GENERAL 	  

Gem-A Hires New CEO

The Gemmological Association of Great Britain (Gem-A) has appointed the Natural History Museum’s Alan Hart (pictured) as its new chief executive officer.

Hart, who will start at Gem-A June 1, joined the London museum in 1981, and since 2012 he has been both principal curator of gems and minerals and head of earth sciences collections.

RJC to Add Colored Gemstones to Coverage

The Responsible Jewellery Council (RJC) has added colored gemstones to its material coverage, the organization announced at the Baselworld show this week. The decision follows discussions with members, external stakeholders and the colored-gemstone sector over the past five years.

The scope of material currently under the RJC includes diamonds, gold and platinum-group metals.

Attendance Rises at JA New York Spring Show

JA New York said attendance at the three-day spring show increased this year, aided by the co-location with the Lueur buyer program and the MJSA Expo New York. The newly established March dates also contributed to the strong foot traffic, the show organizers said.

“We are extremely pleased with the level of traffic at the show,” said Drew Lawsky, group show director of JA New York. “Both our exhibitors and our retailers were consistently happy, and it was very rewarding to see business being done all the way up to the last few minutes of the day.”

Jewelry Industry Summit Concludes with Commitments

The Jewelry Industry Summit, a forum on sustainability and responsible sourcing, closed with commitments to pursue projects including harmonization of various standards and educating workers in the industry.

Large and small companies from across the jewelry pipeline attended the inaugural summit in New York from March 11 to 13, as well as representatives from the U.S. Department of State and other organizations such as banks and accountants.

ECONWATCH 	  

Diamond Industry Stock Report

The conclusion of a long-running jewelers strike saw Indian stocks mostly recover following declines, with Gitanjali Gems (+5.2%) heading the share-price rises. Elsewhere, mining stocks mainly lost value this past week, led by Rockwell Diamonds (-18%), but Firestone Diamonds (+7.7%) continued to rise on news that its mine in Lesotho is on track to start production in the fourth quarter. Birks Group (+30%) led otherwise mixed U.S. stocks. Most European and Far East jewelry and luxury stocks had an underwhelming week.

View the detailed industry stock report.
Mar. 24 (07:25 GMT) Mar. 17 (12:20 GMT) Chng.
$1 = Euro 0.90 0.89 0.01
$1 = Rupee 66.89 66.67 0.2
$1 = Israel Shekel 3.84 3.85 -0.01
$1 = Rand 15.43 15.39 0.04
$1 = Canadian Dollar 1.33 1.30 0.02

Precious Metals Chng.
Gold $1,215.48 $1,266.98 -$51.50 -4.1%
Platinum $954.75 $981.75 -$27.00 -2.8%
Silver $15.20 $15.68 -$0.48 -3.1%

Stock Indexes Chng.
BSE 25,337.56 24,677.37 660.19 2.7%
Dow Jones 17,502.59 17,325.76 176.83 1.0%
FTSE 6,199.11 6,150.68 48.43 0.8%
Hang Seng 20,300.03 20,503.81 -203.78 -1.0%
S&P 500 2,036.71 2,027.22 9.49 0.5%
Yahoo! Jewelry 1,083.16 1,066.82 16.34 1.5%

Rapaport Weekly Market Comment March 31, 2016

Polished market stable with good demand for RapSpec A2, F-I, VS-SI dossiers. Dealers buying only what they have orders for and avoiding inventory purchases. Manufacturers cautious with large volume of new polished expected to enter the market over next few months. Rough prices steady with limited supply expected at next week’s De Beers sight. Miners post strong 1Q but inventory increased by 17M cts. ($2.8B) in 2015 as production was greater than sales. Petra Diamonds sells 32.33 ct. pink rough for $15M (464K/ct.). Indian jewelers resume strike to abolish 1% excise duty. Signet 2015 sales +14% to $6.6B, profit +23% to $478M. U.S. Feb. jewelry sales +5% to estimated $5.5B.

RapNet Data: March 31

Diamonds 1,134,732
Value $7,971,442,991
Carats 1,255,043
Average Discount -28.07%

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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April 6-13 Wed-Wed

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April 13-16 Wed-Sat

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April 19-27 Tue-Wed
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QUOTE OF THE WEEK
As long as the government won’t roll back the excise duty, the strike will continue.

Rajnish Chopra of the All India Bullion Jeweller & Swarnkar Federation on a strike by Indian jewelers over a new 1% excise duty that has been running for about 30 days.

MARKETS 	  

United States: Polished trading stable with steady demand for 0.30 to 1.5 ct., G-J, SI-I1 diamonds. Difficult to find desirable SI, 3X eye-clean diamonds...

Belgium: Sentiment improving despite slow trading after Brussels terror attacks and long Easter weekend. Exhibitors frustrated by high cost and low exposure at Basel show...

Israel: Polished trading slow after March show season. Suppliers disappointed by Basel show...

India: Market is relatively quiet with slow domestic demand as the jewelers strike continues. Jewelers unhappy with government proposed compromise on 1% excise duty...

Hong Kong: Polished trading slower over the long Easter weekend but sentiment remains better than it was a month ago...

Click here for deeper analysis

INSIGHTS 	  

De Beers Claims Greater Accuracy, Consistency in Diamond Grading

An announcement in February that the International Institute of Diamond Grading and Research (IIDGR) has launched its generic diamond grading program surprised very few, but was noteworthy. Through it, the De Beers Group entered what arguably is the most contentious space in the diamond distribution chain where concerns have grown over grading consistency and standards, or lack thereof, in the past few years.…

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INDUSTRY 	  

Kimberley Process Study Aims to Standardize Rough Pricing

The United Arab Emirates-based chair of the Kimberley Process (KP) is consulting with key industry players over potentially devising the first set of global standards for pricing of rough diamonds.

Ahmed Bin Sulayem, the 2016 chair of the KP and executive chairman of the Dubai Multi-Commodities Centre, is in discussions with miners and the World Diamond Council (WDC) as part of a study aimed at determining best practice for valuing rough stones, with plans in place to reach initial findings by the annual KP intersessional meeting in Dubai in May.

Indian Jewelers’ Strike Continues

Swathes of Indian jewelers are still on strike over a new 1% excise duty, it has emerged, as industry bodies continue to protest the tax.

Some 300,000 shopkeepers across India, as well as their staff, have downed tools as part of the action, which is approaching its 30th day.

The GJF called off the strike on March 19 after an eight-hour meeting with the government that also involved the India Bullion and Jewellers Association and the Gem & Jewellery Export Promotion Council, a spokesperson for the All India Gems & Jewellery Trade Federation said. However, regional associations are still going ahead with the walkout, he added.

Kingold Jewelry’s Sales -10% in 2015

Kingold Jewelry, a China-based designer and manufacturer of gold products, reported sales fell 9.7% to $1 billion last year as the price of the precious metal fell.

The price of the precious metal on Comex declined 11% in 2015, according to data compiled by Bloomberg. Revenue was also negatively affected by currency exchange-rate fluctuation, the Wuhan-headquartered company said.

RETAIL & WHOLESALE 	  

U.S. Jewelry, Watch Sales Increase in February

U.S. jewelry and watch sales from all retail outlets rose 4.5% to an estimated $6.17 billion in February, according to provisional data from the government.

Jewelry sales in February advanced 4.5% to an estimated $5.45 billion, while watch sales rose 5.2% to $722 million, according to Rapaport News calculations. Both have now enjoyed 10 straight months of growth.

Signet’s 4Q Revenue +5%

Signet Jewelers reported revenue rose 5.1% to $2.39 billion in its fourth fiscal quarter on strong diamond fashion jewelry sales in the Sterling Jewelers and Zale divisions.

In the 13 weeks to January 30, the average transaction value at Sterling jumped 6%, even as the number of transactions fell 2.3%, driven principally by the strength in diamond fashion jewelry. Sales in the Sterling division advanced 6.9% to $1.45 billion.

The company saw a similar pattern at Zale, where sales increased 2.9% to $655.1 million, with diamond fashion jewelry and bridal driving a 6.2% increase in the average transaction price.

Pink Diamond Appreciates up to 500% since 2007

Christie’s will auction a pink diamond ring for $8 million to $12 million that has appreciated up to 500% in less than a decade since being bought by a South Florida man for his wife.

The 10.07-carat, cushion modified brilliant-cut, fancy intense purple-pink gem flanked on either side by a triangular-shaped diamond will be on offer at the auctioneer’s Magnificent Jewels sale in New York on April 20.

The appreciation from the $2 million purchase price in 2007 comes amid an increase in the value of pink diamonds as supply is forecast to run out and demand has spiked, according to the stone’s appraiser.

Blue Nile to Open First West-Coast ‘Webroom’

Blue Nile will open a ‘webroom’ in Portland, Oregon, this summer, marking the online retailer’s fourth foray into the bricks-and-mortar business and its first physical presence on the U.S. West coast.

Blue Nile is pioneering the online-offline hybrid retail model with one store already in operation in New York and two more set to open on the East coast by early summer. The concept allows shoppers to try on jewelry and browse Blue Nile’s selection on an in-store iPad with the help of non-commissioned consultants.

MINING 	  

Chinese Firms ‘Show Interest’ in Russian Assets

Chinese companies are showing interest in buying Russian state assets such as ALROSA as the government privatizes some of the nation’s largest publicly owned businesses, news agency TASS reported.

“Generally the interest is there,” the Russian news service cited Deputy Prime Minister Arkady Dvorkovich as saying.

Separately, the Moscow Exchange is considering a proposal from ALROSA to develop an exchange trade in diamonds, TASS cited the bourse’s chief executive officer Alexander Afanasyev as saying.

Petra Sells 32-Carat Pink Rough Diamond for $15M

Petra Diamonds sold a 32.33-carat rough diamond from its Williamson mine in Tanzania for $15 million.

The price of the pink diamond translates to $463,965 per carat, Petra said. The miner will also receive 10% of the added value of the polished that comes from the stone.

Golden Yellow Diamonds bought the gem on behalf of M.A. Anavi Diamond Group, which specializes in large colored diamonds.

ALROSA Launches in Vladivostok to Target China

ALROSA will open a branch in the Russian city of Vladivostok, near the country’s border with China, in a bid to increase sales to Asia-Pacific nations and improve cooperation with companies in the region.

The launch, approved by the miner’s supervisory board March 20, is the first step in the creation of a Russian Diamond Centre within the Vladivostok Free Port opened last year.

Lucapa Discovers 68-Carat Diamond at Angola Mine

Lucapa Diamond Company found yet another large diamond, weighing 68.1 carats, at its Lulo mine in Angola, providing further evidence the site is at the “heart of a large diamond province.”

The type-IIa, D-color gem is one of eight “special” diamonds found during trial mining of gravels from the E46 alluvial terraces. The weight of other precious stones found alongside the big diamond ranged from 11.5 carats to 30.5 carats, according to the Australia-based miner.

Tango Gets $30M Loan for Botswana Mine Deal

Tango Mining has secured a $30 million loan from Vanderbilt Commercial Lending that will fund the delayed acquisition of a mine in Botswana from Firestone Diamonds after being granted an extension to raise funds for the purchase.

This follows Tango being given until April 8 to raise the $7.65 million balance of the consideration to buy the BK11 diamond mine in the Orapa/Letlhakane region after it failed to pay a deposit before an earlier deadline last September.

Stornoway Advances Schedule for Renard Mine

Stornoway Diamond Corporation has brought forward plans for the Renard mine in Canada, with commercial production now expected to start by December 31.

This represents a five-month improvement on a previous schedule, the diamond exploration and development company said. First ore delivery is now expected by the end of September.

Stellar Diamonds Narrows 1H Loss

Stellar Diamonds, a West Africa-focused exploration and development company, lowered its loss by 5.2% in its first fiscal half by cutting costs.

The company narrowed its loss to $886,463 in the six months to December 31 from $934,928 a year earlier as it slashed administrative expense by 29%.

During the period, the company focused on trial mining production and resource building at the Baoulé project in Guinea and taking the Tongo kimberlite project in Sierra Leone into production.

Botswana Diamonds Kicks Off Orapa Exploration

Botswana Diamonds widened its loss in the first half of its current fiscal year, the company said, as it kicked off its exploration project in Botswana with partner ALROSA.

The loss grew to $388.4 million (GBP 274 million) in the six months to December 31 from a $211.1 million deficit reported for the same period a year earlier.

The exploration company started sampling at two licenses in the Orapa region of Botswana March 21. Diamond drilling is expected to start in the first week of April.

GENERAL 	  

Baselworld Exhibitors, Buyers Traffic -3%

Baselworld 2016, a global watch and jewelry exhibition, ended March 24, with the number of exhibitors, buyers and visitors falling 3% over the previous show for the second year running. More than 145,000 people attended the show from over 100 countries.

The annual show, organized in Switzerland, was held amid a downturn in the nation’s watch industry, with exports of Swiss timepieces falling 3.3% in 2015 and by the same proportion in February this year.

Jewelers Board of Trade Elects Chair

The Jewelers Board of Trade (JBT) announced Todd Wolleman of New York-based colored stone specialist Leo Wolleman has been elected chairman for a one-year term.

Michael Kaplan of Rocket Jewelry Box in New York will serve as first vice-chairman and Ann Arnold of Arnold Advisory Group in Norwood, New Jersey, will be second vice-chairman during the 12-month period.

ECONWATCH 	  

Diamond Industry Stock Report

Firestone Diamonds (+22%) continued to perform strongly on positive reports about the progress of its Liqhobong mine in Lesotho. In India, several industry stocks dipped as a jewelers strike continued. Declines were led by Goenka Diamond (-7.9%), but C.Mahendra (+7.7%) bucked the trend. U.S. retail shares were generally stable or slightly higher this past week, headed by Blue Nile (+6%), but Birks Group (-17%) led the losses.

View the detailed industry stock report.
Mar. 31 (08:00 GMT) Mar. 24 (07:25 GMT) Chng.
$1 = Euro 0.88 0.90 -0.01
$1 = Rupee 66.24 66.89 -0.7
$1 = Israel Shekel 3.78 3.84 -0.06
$1 = Rand 14.89 15.43 -0.54
$1 = Canadian Dollar 1.30 1.33 -0.03

Precious Metals Chng.
Gold $1,229.55 $1,215.48 $14.07 1.2%
Platinum $965.58 $954.75 $10.83 1.1%
Silver $15.25 $15.20 $0.05 0.3%

Stock Indexes Chng.
BSE 25,379.41 25,337.56 41.85 0.2%
Dow Jones 17,716.66 17,502.59 214.07 1.2%
FTSE 6,159.62 6,199.11 -39.49 -0.6%
Hang Seng 20,706.39 20,300.03 406.36 2.0%
S&P 500 2,063.95 2,036.71 27.24 1.3%
Yahoo! Jewelry 1,077.29 1,083.16 -5.87 -0.5%

Rapaport Weekly Market Comment April 7, 2016

Diamond markets quiet after positive first quarter. March 1 ct. RAPI unchanged, 1Q up +1.4%. Selective buyers offering lower prices as inventories rise and new supply becomes available. High-quality 3 ct.+ demand very weak. Rough trading steady during De Beers sight with reports of a 2-3% price increase. ALROSA cuts 2015 production target to 37-39M cts. Lukoil’s 2015 Grib Diamonds revenue reaches $162M. Sotheby’s HK sells $73M (66% by lot) with De Beers oval, 10.10 ct., fancy vivid blue, IF diamond selling for $31.8M ($3.2M/ct.). Belgium’s March polished exports -6% to $1.2B, rough imports -30% to $979M. Jacques Korn elected president of Antwerp Diamond Bourse.

RapNet Data: April 7

Diamonds 1,158,944
Value $8,033,788,292
Carats 1,279,171
Average Discount -28.28%

www.rapnet.com

The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network.

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RAPAPORT ANNOUNCEMENTS
April 6-13 Wed-Wed

Rapaport Single Stone Auction 

New York & Israel

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April 13-16 Wed-Sat

AGS Conclave

Washington, DC, USA

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April 19-27 Tue-Wed

Rapaport Melee Auction

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May 11-18 Wed-Wed

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QUOTE OF THE WEEK
The Oppenheimer Blue can only be described as one of the rarest gems in the world. It is the gem of gems.

François Curiel, chairman of Christie’s Asia Pacific and China, on the 14.62-carat diamond due to be auctioned in Geneva in May for an estimated $38 million to $45 million.

MARKETS 	  

United States: Polished trading stable. Ovals in short supply and easier to sell as rounds inventory increases. Good demand for 0.30 to 1.99 ct., G-J, VS2-I1 diamonds. High-quality big-stone demand very weak...

Belgium: Activity quieter and sentiment weaker in April. Rising concern about sluggish European consumer demand and synthetic diamonds. Steady demand for 0.30 to 1 ct., G-I, VS-SI diamonds...

Israel: Polished trading slowed since March Hong Kong show with sluggish big-stone demand. Steady demand for 0.30 to 0.99 ct., D-H, VS-SI, RapSpec A2 diamonds. Steady fancy shape demand for ovals, pears and emeralds...

India: Market is relatively quiet with slow domestic demand as the jewelers strike continues. Jewelers unhappy with government proposed compromise on 1% excise duty...

Hong Kong: Sentiment improving and dealers expect 2016 to be better than last year. Polished trading picked up since Easter break with stable demand for dossiers and 1 ct., D-J, VS-SI RapSpec A2 diamonds...

Click here for deeper analysis

RAPAPORT COMMENT 	  

Synthetic Diamond Scam

Martin Rapaport takes on the issue of synthetic diamonds in his “Synthetic Diamond Scam” article and in an open letter he calls out Leonardo DiCaprio for falsely claiming that his synthetic diamonds are more ethical than legitimate natural diamonds from artisanal diggers. Rapaport pleads with DiCaprio to use his fame and fortune to support fair trade diamond jewelry which can significantly improve the lives of millions of the poorest people on earth.

Click here for the article | Click here for the open letter

INDUSTRY 	  

Polished Diamond Prices Stable in March

Polished diamond prices were stable in March supported by steady dealer trading even though the outlook for consumer demand remains uncertain. In the first quarter, sentiment improved as polished prices rose and profitability increased on select new production.

The RapNet Diamond Index for 1-carat, GIA-graded diamonds was flat in March. RAPI for 0.30-carat diamonds fell 0.6% and RAPI for 0.50-carat diamonds was unchanged. RAPI for 3-carat diamonds slipped 0.4%.

In the first quarter, RAPI for 1-carat diamonds rose 1.4%, extending the uptrend from the fourth quarter. However, the index fell 4.6% below its level last year.

DPAs Marketing Campaign to Debut in June

The Diamond Producers Association (DPA) will introduce its marketing campaign at the JCK Las Vegas jewelry show in June, it said this week.

“The DPA will be presenting its campaign to the trade for the first time in Las Vegas at JCK,” said Sally Morrison, the DPA’s managing director of marketing.

The promotions drive will come just over a year after the DPA was formed in May 2015 by seven leading diamond miners.

Belgium’s Diamond Trade Slides in March

Belgium’s polished diamond exports fell 5.9% year on year to $1.16 billion in March, according to the Antwerp World Diamond Centre. By volume, polished exports slid 8.1% to 489,611 carats, while the average price climbed 2.4% to $2,372 per carat.

Among Belgium’s main trading partners, polished exports to Hong Kong plummeted 53% but shipments to Switzerland increased 8.5%. Exports to the U.S. rose 9.6%.

RBI Relaxes Credit Terms on Diamond Imports

The Reserve Bank of India has allowed authorized dealer banks to extend the period for which “clean credit” can be provided for rough and polished diamond imports, the Gem and Jewellery Export Promotion Council (GJEPC) reported.

Clean credit refers to a loan provided by a foreign supplier to its Indian customer for importing diamonds without formal guarantees such as a letter of credit or undertaking by an Indian financial institution, the GJEPC explained. Under the new rules, credit can be given for more than 180 days from the date of shipment, whereas previously there was a 180-day restriction on the timeline.

Korn Elected Antwerp Diamond Bourse President

The Antwerp Diamond Bourse has appointed Jacques Korn, a 40-year industry veteran, as president and Rajender Gahani as executive director.

Korn, who was previously the bourse’s executive director, also sits on the board of the Antwerp World Diamond Centre (AWDC). Both Korn and Gahani will serve a four-year term.

RETAIL & WHOLESALE 	  

De Beers Blue Diamond Fetches $32M

Sotheby’s sold the ‘De Beers Millennium Jewel 4’ for $31.8 million (HKD 248.3 million) in Hong Kong, setting a record for the highest price ever paid for a jewel at an auction in Asia.

The oval-shaped, 10.10-carat, fancy vivid blue, internally flawless gem fetched $3.2 million per carat. In total, the auctioneer’s Magnificent Jewels and Jadeite auction on April 5 sold $73.3 million of jewels, or 65.7% by lot and 69.3% by value.

Christie’s to Auction Record-Breaking Blue Diamond

The largest fancy vivid-blue diamond ever to be put up for auction is set to go under the hammer at Christies, marking the latest in a string of large colored diamonds coming up for sale.

The 14.62-carat ‘Oppenheimer Blue’ will lead Christie’s Magnificent Jewels auction in Geneva on May 18, with an estimated value of $38 million to $45 million. The stone is named after its previous owner Sir Philip Oppenheimer, who was the chairman of De Beers Diamond Trading Company from 1975 until his death in 1995.

DGSE Sales Decline 14% in 2015

Sales at DGSE Companies dived 14% in 2015 because of weakness in its jewelry and scrap businesses, according to the pawnbroker.

Revenue dropped to $60.9 million in 2015 from $70.7 million the previous year. The company, which buys and sells jewelry, diamonds, fine watches, coins and precious metals, recorded a loss from continuing operations of $2.3 million, compared with a loss of $635,693 in 2014.

MINING 	  

ALROSA Cuts Production Target for 2016

ALROSA lowered its guidance for production of rough diamonds in 2016 in a bid to reduce accumulated inventory from last year.

In a meeting on April 1, the company cut its target for production to between 37 million and 39 million carats, from 39 million carats. The revision will be achieved by implementing an employee-leave schedule, implying a reduction in output won’t impact jobs or productivity, management explained.

Lukoil’s Diamond Sales Hit $162M in 2015

Lukoil’s revenue from diamond sales hit $162 million (RUB 11 billion) in 2015 as the company increased output at its Grib mine. Sales in the prior year stood at $15 million given that production started in September 2014.

The majority of Lukoil’s diamond output is sold via its Antwerp-based Grib Diamonds subsidiary. About 20% of the goods are sold independently in Russia.

First Kimberlite Sales from Lace Mine in 85 Years

DiamondCorp recorded a sale of kimberlite diamonds from its Lace mine in South Africa for the first time since 1931, achieving an average price of $175 per carat.

The mining and exploration company sold 6,247 carats of kimberlite diamonds of more than 1.25 millimeters in diameter for $1.1 million. The company sold a further 2,401 carats of fine diamonds and stones from tailings for $46,000, or $19 per carat, giving a total of 8,648 carats of all sizes of rough diamonds.

Gemfields Emerald Auction Fetches $33M

Gemfields raised $33.1 million after fetching record average prices at its emerald auction in Lusaka, Zambia, from March 30 to April 3.

The company sold 469,000 carats of the 558,000 carats of emeralds on offer at an average price of $70.68 per carat, a record at the company’s auctions. Of the 18 lots presented, 16 were sold.

Stornoway Raises Production Guidance for Renard Mine

Stornoway Diamonds reported that its Renard project will likely yield 25% more diamonds than projected and operate for four more years than expected as the mine prepares for commercial production by year-end.

An updated plan revealed a surge in the Canadian mines probable mineral reserve from 17.9 million to 22.3 million carats, extending its operating life from 11 to 14 years.

Kennady Diamonds Hires Dedicated CEO

Kennady Diamonds has appointed Rory Moore as its president and chief executive officer, effective May 1. Moore is a former CEO of Mineral Services Group of Companies and Canabrava Diamond Corp.

Moore replaces Patrick Evans, who has led the diamond exploration company since its incorporation in 2012 and remains president and CEO of Kennady Diamonds’ parent company, Mountain Province Diamonds. The appointment comes as Kennady Diamonds’ exploration project in Canada has advanced to the stage that it requires a dedicated CEO, the company said.

GENERAL 	  

JBT Appoints Former HSBC Credit Specialist as President

The Jewelers Board of Trade (JBT) said it appointed Anthony Capuano as its new president.

Capuano is a former vice-president and senior relationship manager at HSBC Bank, where has was responsible for the bank’s New York diamond and jewelry portfolio. He previously held similar positions at Scotia Mocatta, part of Scotiabank, and Bank of America. He replaces Dione Kenyon, who will retire later this spring after helping with the leadership transition.

Cecilia Gardner to Step Down as JVC Chief

The Jewelers Vigilance Committee (JVC) said its longstanding chief executive officer and president, Cecilia Gardner, will step down at the beginning of 2017.

Gardner’s exit will follow JVC’s planned celebration for completing 100 years. Discussions are ongoing with the executive committee over the scope of Gardner’s continued role at JVC, a company she has led since being promoted from general counsel in 2005.

Israel Bourse to Hold Rough Diamond Week

The Israel Diamond Exchange (IDE) is seeking to expand the third International Rough Diamond Week in May, the organizers said.

“After the success of the first two events, we are now seeking to expand this into a truly international rough marketplace. This will in turn enable us to offer a larger and more varied rough supply to both local and foreign buyers,” said Yoram Dvash, president of the IDE.

Ex-Cartier Chairman Joins Upstart Jewelry Brand

Ralph Destino, a former chairman of Cartier and the Gemological Institute of America (GIA), has joined jewelry upstart CADAR to guide the company’s entry into the industry.

Destino, who has joined CADAR as a director, will particularly focus on developing the company’s relationships with retail jewelers across the U.S

ECONWATCH 	  

Diamond Industry Stock Report

U.S. and European retail stocks suffered this past week, led by Movado Group (-8%) on disappointing guidance. Indian stocks were mixed, with rises led by Lypsa Gems (+7.3%). Stellar Diamonds (-13%) and Firestone Diamonds (-11%) headed the declines among miners, while most other mining stocks were steady or slightly increased.

View the detailed industry stock report.
Apr. 7 (10:47 GMT) Mar. 31 (08:00 GMT) Chng.
$1 = Euro 0.88 0.88 0.00
$1 = Rupee 66.56 66.24 0.3
$1 = Israel Shekel 3.78 3.78 0.01
$1 = Rand 15.20 14.89 0.31
$1 = Canadian Dollar 1.31 1.30 0.01

Precious Metals Chng.
Gold $1,236.41 $1,229.55 $6.86 0.6%
Platinum $954.50 $965.58 -$11.08 -1.1%
Silver $15.18 $15.25 -$0.07 -0.5%

Stock Indexes Chng.
BSE 24,685.42 25,379.41 -693.99 -2.7%
Dow Jones 17,716.05 17,716.66 -0.61 0.0%
FTSE 6,162.13 6,159.62 2.51 0.0%
Hang Seng 20,266.05 20,706.39 -440.34 -2.1%
S&P 500 2,066.66 2,063.95 2.71 0.1%
Yahoo! Jewelry 1,087.12 1,077.29 9.83 0.9%

Rapaport Weekly Market Comment April 14, 2016

Rough markets firm as De Beers sells $660M in sales cycle 3 (April) following $617M in cycle 2 (Feb.) Steady mid-single-digit premiums for many De Beers boxes. Dealers speculating on over-priced big stone rough but demand for larger polished is weak. Polished markets slowing. China clamping down on overseas luxury purchases with 15% tax on jewelry imports by “daigou” tourist shoppers and online buyers. Chow Tai Fook 3Q sales -26% impacted by Chinese tourists moving purchases overseas. LVMH 1Q watch & jewelry revenue +7% to $884M. Dominion 2015 revenue -21% to $721M, loss of $34M vs. profit of $67M. U.S. Feb. polished imports +0.3% to $1.8B, polished exports +10% to $2B.

RapNet Data: April 14

Diamonds 1,151,181
Value $7,896,534,093
Carats 1,256,535
Average Discount -28.16%

www.rapnet.com

The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

April 19-27 Tue-Wed

Rapaport Melee Auction

New York & Dubai

View Details

May 11-18 Wed-Wed

Rapaport Single Stone Auction

New York & Israel

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May 17-25 Tue-Wed

Rapaport Melee Auction 

New York & Dubai

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QUOTE OF THE WEEK
So far, 2016 has seen significantly stronger rough diamond demand than that experienced at the end of 2015 as the actions taken by the industry continue to have a positive effect.

Philippe Mellier, CEO of De Beers, on the miner’s latest rough sales increase

MARKETS 	  

United States: Polished trading slows in April. Steady demand for bread-and-butter 0.30 to 1.99 ct., G-J, SI-I2 diamonds. Suppliers holding prices firm while buyers find it difficult to fill specific orders...

Belgium: The market is stable. Good dealer demand for specialty items such as fancy color and certain fancy shape diamonds. Pears and ovals steady, cushions slower and princess cuts weak...

Israel: Polished trading cautious amid tough market for large diamonds. Sluggish activity in April with dealers ready to take vacation during 7-day Passover holiday (April 22-28)...

India: Trading slowed in the past two weeks after positive first quarter. Buyers resisting higher prices for new polished supply. Good Far East demand for GIA dossiers with some shortages in RapSpec A2 diamonds...

Hong Kong: Polished demand is order specific and there is very little buying for inventory. Fancy colors doing better than colorless stones with good demand for rare pink and blue diamonds...

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INSIGHTS 	  

Will Upbeat Rough Demand Slow the Diamond Market Recovery?

Rough diamond trading was surprisingly upbeat in April given that polished demand is restrained and inventory levels continue to rise. After a good first quarter, in which rough and polished trading was driven by restocking of the midstream, concern deepened this month that an oversupply of polished diamonds will pressure the market…

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INDUSTRY 	  

De Beers April Sales Rise to $660M

De Beers reported sales of rough diamonds jumped to $660 million in its April cycle as stability in both polished prices and wholesale activity supported solid demand.

Sales were 7% above the February second-cycle revenue, which was revised up to $617 million. The result compares with an estimated $536 million of sales recorded in the third sight a year ago and is also significantly stronger than the sights in the second half of 2015, according to Rapaport News records.

Amid strong demand in the first quarter, De Beers increased prices by low single-digit percentages.

China Hikes Taxes on Informal Jewelry Imports

Chinese authorities have moved to crack down on a "gray" market in luxury imports by raising taxes on jewelry and watches.

The government increased tariffs on watches ordered from abroad to 60% from 30% and on jewelry to 15% from 10% effective from April 8, according to a Reuters report.

The measures are directed at individual shoppers – known as ‘daigous’ – who bring suitcases full of luxury goods into the country and then resell them in person or online.

Indian Jewelers End Six-Week Strike

Indian jewelers called off a strike against a 1% tax after about six weeks amid signs that the government will not budge on the new excise duty.

At least 90% of jewelers around the country returned to work April 13 but negotiations between the All India Gems & Jewellery Trade Federation and the government continue, a spokesperson for the industry body said.

The end of the strike comes at an opportune time ahead of the festival of Akshaya Tritiya on May 9, which Indians mark by buying gold.

U.S. Polished Exports Leap in February

The U.S. trade in polished diamonds showed an uptick in February as exports jumped 10%, while imports were steady.

Imports of cut diamonds nudged up 0.3% year on year to $1.75 billion, with the average price rising 4.6% to $2,273 per carat. Inbound shipments by weight fell 4%.

Polished diamond exports, meanwhile, jumped 10% to $1.97 billion despite a decrease in total volume as the average price per carat soared 39% to $1,537 per carat.

RETAIL & WHOLESALE 	  

Pink Diamond Tops Sotheby’s Geneva Billing

Sotheby’s expects to sell a 15.38 carat "supremely rare" pink diamond for $28 million to $38 million (CHF 27.2 million to CHF 36.9 million) at an auction in Geneva next month.

The pear-shape, type IIa diamond known as the “Unique Pink” will go under the hammer at the Magnificent Jewels and Noble Jewels auction May 17. It is the largest fancy vivid pink pear-shaped diamond to be offered at auction.

Chow Tai Fook’s Sales Hit by China, Hong Kong Downturn

Chow Tai Fook reported quarterly same-store sales from China and Hong Kong plunged as a weaker consumer sentiment and the region’s economic slowdown dampened performance.

Same-store revenues dived 26% in the fourth fiscal quarter that ended March 31, the Hong Kong-based jewelry retailer said, with total sales dropping 26%, or 22% ex-currency. Gem-set jewelry sales fell 23%.

U.S. Jewelry Store Revenues Hit High in February

U.S. jewelry store sales in a seasonally-strong February surpassed the highest level the month has seen in years as shoppers ploughed $2.66 billion in specialist retailers.

Sales in the month that includes Valentine’s Day jumped 7.7% from a year ago, according to the U.S. Census Bureau. The increase appears to validate an upward trend seen in an earlier data release that showed a 4.5% rise in jewelry and watch revenues across all retail outlets in February.

LVMH’s 1Q Jewelry & Watch Revenue Rises

LVMH Moët Hennessy Louis Vuitton’s watch and jewelry sales jumped 7% in the first quarter driven by the Bulgari brand and the companys connected smartwatch.

With sales of $884.1 million (EUR 774 million), watches and jewelry was the luxury group’s joint fastest-growing business group by revenue in the three months to March 31, alongside perfumes and cosmetics.

New Zealand, U.S. Growth Boosts Michael Hills Sales

Michael Hill reported revenue jumped 9.1% year on year to $320.2 million (AUD 420.8 million) in its first three fiscal quarters as sales advanced in each of its regional divisions.

Total same-store sales rose 5.1% in the nine months to March 31, the New Zealand-based jeweler said. The biggest same-store revenue increase in local currency terms was recorded on the home turf, at 6.5%, while the U.S. registered the fastest growth in all sales with a 29% surge.

MINING 	  

Dominion Swings to Loss in Fiscal 2016

Dominion Diamond Corporation declared a net loss in fiscal 2016. This was due to a weaker diamond market coupled with lower gem prices throughout the year, which cut revenue from the companys two Canadian mines.

The company recorded a $38.8 million loss over a year to January 31, compared with a profit of $73.6 million in fiscal 2015. Sales dived 21% to $720.6 million as revenue from the Ekati mine that the company owns outright slid 18% and the Diavik pit, where Dominion has a 40% ownership, suffered a 27% drop.

Lucapa’s Lulo Mine Posts Record 1Q Sales

Lucapa Diamond Company said quarterly diamond sales from its Lulo project in Angola hit a record after the largest diamond in the nation’s history fetched a staggering $16 million.

Revenue in the three months to March 31 surged to $23.1 million, which is more than double the total sales for 2015, with the average price catapulting to $11,983 per carat from a sale of 1,931 carats. Sales at the Lulo Diamond Project commenced in the second quarter of last year.

India Plans Diamond-Mine Auction Debut

India is set to auction off a diamond mine for the first time, according to a Reuters report that cited India’s mines secretary Balvinder Kumar.

The Indian state of Madhya Pradesh in the center of the country plans to float tenders for the auction of the 136-hectare Hatupur block, with the process likely to be completed in “about forty days,” according to the report. The mine has 604,336 tonnes of mineral resource

GENERAL 	  

Bain Predicts Luxury Uptick

Demand for personal luxury goods in the U.S. and China is set for resurgence next year, lifting growth in the $285 billion (EUR 250 billion) market that hit a trough in 2016, according to a Reuters report.

Luxury sales will grow about 1% at constant exchange rates this year compared with a 1.5% increase in 2015, the news agency reported, citing Bain & Co. Over the next five years, the personal luxury goods industry will grow 2% to 3% per annum.

ECONWATCH 	  

Diamond Industry Stock Report

Mining stocks strengthened this past week as investor confidence was buoyed by De Beers latest increase in rough sales. The diamond producers parent, Anglo American (+30%), led the rises, followed by Petra Diamonds (+15%) and Rio Tinto (+15%). Several U.S. stocks dipped, headed by Nordstrom (-5%) and JC Penney (-4.9%), in a week that saw disappointing nationwide retail figures for March. In the Far East, Chow Tai Fook advanced 8.1% despite reporting a large quarterly sales decline.

View the detailed industry stock report.
Apr. 14 (10:49 GMT) Apr. 7 (10:47 GMT) Chng.
$1 = Euro 0.89 0.88 0.01
$1 = Rupee 66.59 66.56 0.0
$1 = Israel Shekel 3.79 3.78 0.01
$1 = Rand 14.53 15.20 -0.67
$1 = Canadian Dollar 1.28 1.31 -0.03

Precious Metals Chng.
Gold $1,240.18 $1,236.41 $3.77 0.3%
Platinum $991.00 $954.50 $36.50 3.8%
Silver $16.12 $15.18 $0.94 6.2%

Stock Indexes Chng.
BSE 25,626.75 24,685.42 941.33 3.8%
Dow Jones 17,908.28 17,716.05 192.23 1.1%
FTSE 6,360.00 6,162.13 197.87 3.2%
Hang Seng 21,337.81 20,266.05 1,071.76 5.3%
S&P 500 2,082.42 2,066.66 15.76 0.8%
Yahoo! Jewelry 1,124.51 1,087.12 37.39 3.4%

Rapaport Weekly Market Comment April 21, 2016

Polished trading quiet. Suppliers refusing low offers for better-quality RapSpec A2 diamonds. Manufacturing profit declining with high rough prices and weak polished demand. Rising expectations for U.S. demand as Dow surpasses 18,000. De Beers 1Q production -10% to 6.9M cts., sales -10% to 7.6M cts. ALROSA 1Q production -2% to 8.2M cts., sales +34% to 12.1M cts. Sotheby’s NY sells $30M (71% by lot) but Shirley Temple 9.54 ct. blue diamond fails to sell. Israel 1Q polished exports -17% to $1.4B. Israeli police probing Hanan Abramovici over $60-65M owed to bourse members. THE RAPAPORT PRICE LIST WILL NOT BE PUBLISHED ON APRIL 29 DUE TO THE JEWISH HOLIDAY OF PASSOVER.

RapNet Data: April 21

Diamonds 1,163,906
Value $8,004,379,054
Carats 1,273,158
Average Discount -28.36%

www.rapnet.com

The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS
April 19-27 Tue-Wed

Rapaport Melee Auction

New York & Dubai

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May 11-18 Wed-Wed

Rapaport Single Stone Auction

New York & Israel

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May 17-25 Tue-Wed

Rapaport Melee Auction 

New York & Dubai

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QUOTE OF THE WEEK
The Israel Diamond Exchange board of directors will show zero tolerance to anyone who brings harm to other bourse members.

IDE managing director Eli Avidar commenting on an investigation into tens of millions of dollars owed to traders by Hanan Abramovici Diamonds Ltd

MARKETS 	  

United States: Quiet polished trading with many New York dealers taking vacation during next week’s Passover holiday. Buyer’s market developing as suppliers reduce prices on unwanted excess inventory...

Belgium: Confidence low and trading slow. Dealers focused on filling orders with very little buying for inventory. Steady demand for pointer sizes and 1 to 2 ct., G-J, VS-SI diamonds...

Israel: Sentiment weak with default of estimated $60-65M owed to the trade by Hanan Abramovici. Trade is concerned bankruptcies may follow. Polished trading slow. Big-stone demand weak with limited selective orders...

India: Trading is relatively slow and the market is expected to be quiet through April-May. Weak domestic demand resulting from jewelers’ strike impacting cash flows in the diamond sector...

Hong Kong: Polished trading stable, continuing momentum since the March show. Concern about softening prices and weak big-stone demand. Steady demand for 0.30 to 1 ct., D-J, VS-SI, 3X diamonds...

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INDUSTRY 	  

Police, Israel Bourse Probe Trader’s Debts

The Israel Diamond Exchange (IDE) said it is investigating complaints from “several” bourse members that a cash-strapped trader owes them tens of millions of dollars.

Hanan Abramovici Diamonds Ltd. owes the money for goods it bought from traders, the IDE said. Israel’s business daily Globes reported $60 million to $65 million worth of diamonds are involved and “up to a dozen” gem companies could potentially go bankrupt as a result.

A spokesperson for the Israeli police said it is investigating the case.

India U-Turns on Koh-i-Noor

India’s culture ministry said it will make every effort to bring back the 105.6-carat Koh-i-Noor diamond, days after the nation’s solicitor-general stated it should stop claiming it, The Guardian reported.

Solicitor-General Ranjit Kumar told the nation’s Supreme Court April 18 India should give up its claim to the gem, part of Britain’s crown jewels for more than 100 years, because it was “neither stolen nor forcibly taken by British rulers."

But, on April 19, India’s culture ministry issued a statement saying it was yet to make its position known, and that India’s government would make all possible efforts to bring back the diamond, according to the report.

Israel’s Polished Exports -17% in 1Q

Israel’s polished-diamond exports dived 17% to $1.44 billion in the first quarter.

In volume terms, polished exports dropped 15% to 528,310 carats, resulting in a 2.1% decline in the average price to $2,720 per carat.

Polished exports to the U.S., after returns, slid 21% to $499.2 million over January to March, according to data compiled by the Ministry of Industry, Trade and Labor.

GHI Gemological Laboratory Reports to be Listed on RapNet

GHI Gemological Laboratory said its diamond reports will be listed on RapNet – Rapaport’s Diamond Trading Network, as the lab expands its presence in the marketplace.

Diamonds with GHI reports have been available in U.S. retail stores and online since 2015, according to the company, which has labs in New York, Los Angeles and Miami. GHI labs specialize in identifying and evaluating loose white diamonds and white-diamond jewelry.

RETAIL & WHOLESALE 	  

Shirley Temple’s Blue Diamond Unsold at Auction

A 9.54-carat fancy deep blue diamond once owned by entertainer and diplomat Shirley Temple failed to sell at Sotheby’s auction in New York.

“Unfortunately, tonight wasn’t its night in the salesroom, but we remain fully confident that it will find a buyer,” Sotheby’s said.

The gem, estimated at $25 million to $35 million, led the Magnificent Jewels sale, which fetched $29.9 million in total, with 71% sold by lot.

‘Jubilee Ruby’ Fetches $14M at Christie’s New York

A 15.99-carat Burmese ruby sold for $14.2 million at Christie’s New York Magnificent Jewels auction in New York on April 20.

The oval-shaped stone within a circular-cut diamond and polished gold surround, known as the ‘Jubilee Ruby,’ fetched $885,866 per carat. The item, which was estimated at $12 million to $15 million, was the highlight of the auction. The auction realized a total of $57 million.

Luk Fook’s 4Q Same-Store Sales -27%

Luk Fook reported same-store retail sales slumped 27% in the fourth fiscal quarter because of “sluggish” consumer sentiment in Greater China.

Revenue from Hong Kong and Macau dived 28% in the three months that ended March 31. Sales from mainland China fell at a slower pace, sliding 1%, as a 4% increase in gem-set jewelry revenue reduced the speed of decline.

Richemont Veteran Joins Hearts on Fire

Hearts On Fire has appointed Stephane Barraque, a former executive at Richemont and LVMH, to a newly-created role of global chief revenue officer.

Barraque is tasked with developing the diamond brand, owned by Chow Tai Fook, and making it more global. He will also be responsible for managing the brand’s sales team and its retail stores.

Singapore Retailer Joins World Diamond Mark Scheme

Luvenus Jewellery has become Singapore’s first retail jeweler to join the World Diamond Mark’s Authorized Diamond Dealer program.

Displaying the seal in four of the company’s retail shops will enhance consumer confidence and potentially improve sales, according to Parthiban Murugaiyan, managing director of Luvenus.

MINING 	  

De Beers Reduces 1Q Output by 10%

De Beers diamond production slid 10% to 6.9 million carats in the first quarter as the miner reduced output in response to market conditions.

Production from Debswana, a joint venture with the Botswanan government, fell 5% to 5.3 million carats in the three months to March 31.

Consolidated sales by volume dropped 10% to 7.6 million carats, reflecting one fewer sight in the quarter compared with a year ago.

ALROSA’s 1Q Sales Rise, Production Slips 2%

ALROSA’s rough diamond sales jumped an estimated 16% in value terms during the first quarter.

The miner reported it sold “at least” $1.3 billion worth of rough in the three months to March 31, compared with $1.1 billion a year earlier, according to Rapaport News estimates.

The company reduced first-quarter production by 2.3% to 8.2 million carats, in line with its stated strategy to reduce inventory accumulated last year.

Rio Tinto’s 1Q Diamond Output Jumps

Rio Tinto reported first-quarter diamond production jumped 10% to 4.5 million carats because of higher mining rates and availability of a bigger ore stockpile at its Diavik mine.

The miner recovered 1.1 million carats from its 60% owned Diavik mine in Canada’s Northwest Territories, a surge of 26%. Production from the company’s Argyle mine in Western Australia rose 5% to 3.4 million carats.

Dominion Diamond Corporation, Rio Tinto’s partner in Diavik with a 40% interest, said its share in output from the mine soared to 754,000 carats.

Lucara Tender Fetches $51M

Lucara Diamond Corp. sold 10 rough diamonds for $51.3 million at its first exceptional stone tender of the year.

The miner sold seven diamonds for more than $2 million each at the tender April 13. The largest was a 296.7-carat, type-IIa stone that fetched $12.19 million, or $41,008 per carat, while a 245.4-carat diamond went for $10.49 million, or $42,738 per carat.

All diamonds were sourced from the company’s Karowe mine in Botswana.

DiamondCorp Makes $72K From Sale of Two Polished Stones

DiamondCorp said the proceeds from a sale of two polished diamonds, which originated from a 22.1-carat rough stone, show beneficiation creates “significant additional value” for miners.

The company sold the rough – extracted from its Lace mine in South Africa – to its beneficiation joint venture in January. It was manufactured into two “high-quality” diamonds which sold for a combined $261,361.

DiamondCorps pre-agreed 50% share of the profit from the polished – or $71,979 – lifted its total revenue to $182,529, or $8,256 per carat.

GENERAL 	  

VICENZAORO Dubai 2016 Participation Rises

The second edition of the VICENZAORO Dubai jewelry exhibition attracted 10,142 international operators, buyers and visitors this year, according to organizers.

The exhibition, which ran April 14 to 17, drew visitors from 107 countries and featured collections from more than 400 brands, the organizers said. The first edition in 2015 attracted more than 6,000 regional and international visitors from over 110 countries.

American Gem Society Elects President

The American Gem Society (AGS) elected Scott Berg as its president, succeeding Louis Smith.

Berg (pictured), a certified gemologist at Lee Michaels Fine Jewelry in Baton Rouge, Los Angeles, will hold the position until April 2018.

AGTA among New Members of U.S. Jewelry Council

The U.S. Jewelry Council, which works to ensure the industry is collectively represented at the government and international level, announced the addition of four new members.

The American Gem Trade Association, Diamond Club West Coast, the National Association of Jewelry Appraisers and the Silver Promotion Service have joined the lobby, which now represents 13 associations.

ECONWATCH 	  

Diamond Industry Stock Report

A strong week for mining stocks saw many gain in value, led by Peregrine Diamonds (+15%). U.S. retail was mixed, with Charles & Colvard (-5.5%) recording the biggest decline. Indian retailers appear to be recovering following the end of a six-week strike as several gained this past week, headed by Gitanjali Gems (+9.2%).

View the detailed industry stock report.
Apr. 21 (12:24 GMT) Apr. 14 (10:49 GMT) Chng.
$1 = Euro 0.88 0.89 -0.01
$1 = Rupee 66.28 66.59 -0.3
$1 = Israel Shekel 3.76 3.79 -0.03
$1 = Rand 14.21 14.53 -0.33
$1 = Canadian Dollar 1.26 1.28 -0.02

Precious Metals Chng.
Gold $1,265.75 $1,240.18 $25.57 2.1%
Platinum $1,036.95 $991.00 $45.95 4.6%
Silver $17.63 $16.12 $1.51 9.4%

Stock Indexes Chng.
BSE 25,880.38 25,626.75 253.63 1.0%
Dow Jones 18,096.27 17,908.28 187.99 1.0%
FTSE 6,370.76 6,360.00 10.76 0.2%
Hang Seng 21,622.25 21,337.81 284.44 1.3%
S&P 500 2,102.40 2,082.42 19.98 1.0%
Yahoo! Jewelry 1,128.90 1,124.51 4.39 0.4%

Rapaport Weekly Market Comment April 27, 2016

Diamond trading very quiet during Passover holiday. Rising expectations for May Day retail holiday as China’s gold imports increase. U.S. demand steady but jewelers avoiding unnecessary inventory and taking goods on memo. U.S. 2015 retail diamond jewelry demand +5% to $39B, global consumption -2% to $79B, according to De Beers insight report. Rough trading stabilizing as manufacturing profit margins tighten. Petra Diamonds 3Q sales +25% to $121M, production +26% to 995,905 cts. Christie’s NY sells $57M (80% by lot) with 15.99 ct. Burmese ruby sold for $14.2M ($3.6M/ct.). Swiss watch March exports -16% to $1.4B. AWDC highlights reduced Antwerp bank financing in 2015 annual report.

RapNet Data: April 27

Diamonds 1,155,870
Value $7,891,332,625
Carats 1,258,643
Average Discount -28.53%

www.rapnet.com

The RapNet Diamond Index (RAPI™) is the average asking price in hundred $/ct. of the 10 percent best priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet - Rapaport Diamond Trading Network.

Get Current Price List | Subscribe to Rapaport | Join RapNet

RAPAPORT ANNOUNCEMENTS

May 11-18 Wed-Wed

Rapaport Single Stone Auction

New York & Israel

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May 17-25 Tue-Wed

Rapaport Melee Auction 

New York & Dubai

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June 2-5 Thu-Sun

Las Vegas Antique Jewelry & Watch Show

Las Vegas, NV, USA View Details

June 3-6 Fri-Mon

JCK Las Vegas

Las Vegas, NV, USA Booth: B55051View Details
QUOTE OF THE WEEK
The global diamond industry took a beating this year. Thanks to our strong foundations and ability to be agile and adopt innovative new technologies, Antwerp has succeeded in safeguarding its world-leading position with regard to rough as well as polished diamonds. Antwerp will consequently emerge from this downturn in better shape than our competitors.

Ari Epstein, chief executive officer of the Antwerp World Diamond Centre (AWDC) in the groups 2015 annual report.

MARKETS 	  

United States: New York trading quiet with many dealers on vacation during Passover holiday. Suppliers reducing prices on unwanted excess inventory but holding firm on top-quality RapSpec A2 goods...

Belgium: Seasonally slow period with dealers concerned about weak demand. Dealers focused on filling orders with very little buying for inventory...

Israel: Most dealers away and Israel Diamond Exchange (IDE) services closed during Passover holiday (April 24 to 28)...

India: Trading slow as expected during April-May. Jewelry retailers focused on gold sales ahead of Akshaya Tritiya festival on May 9...

Hong Kong: Polished trading stable. Steady demand for 0.30 to 1 ct., D-J, VS-SI, 3X diamonds. Big stone demand weak...

Click here for deeper analysis

INSIGHTS 	  

Making Luxury More Affordable in China

Diamond dealers still see China as the engine of industry growth but Premier Xi Jinping’s government can do more to encourage its development. As the country transitions to a consumer-driven economy, luxury products such as jewelry are considered expensive in China, forcing shoppers to look abroad for their purchases…

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INDUSTRY 	  

U.S. Diamond Jewelry Sales Surges in Weak Global Market

U.S. demand for diamond jewelry grew 5% to $39 billion in 2015 supported by a sustained economic recovery and an improved labor market, according to a De Beers report. Growth in the U.S., however, failed to lift the global industry which contracted 2% because of sluggishness in emerging-market economies and the strength of the U.S. dollar.

Global diamond jewelry demand fell to $79 billion, off its record high of $81 billion in 2014. At constant exchange rates, demand advanced 2%. Chinese diamond jewelry demand, including from purchases abroad, rose 1%, or 3% when measured in terms of yuan. Other major markets including India, Japan, and the Gulf, registered declines in sales.

Tight Margins, Financing Challenge Antwerp Trade

The Antwerp World Diamond Centre (AWDC) said tighter profit margins and lower bank credit squeezed Belgium’s diamond trade in 2015, a difficult year amid an “unsettling global economy”. The average profit margin reported by wholesalers in 2015 was in the 0.1% to 0.4% range, the same as previous year, according to the AWDC’s annual report.

The report also acknowledged funding pressure on diamantaires in relation to rough diamond purchases, after the global banking and sovereign debt crisis dramatically altered lending practices. Industry financing was also impacted by the banking industry’s policy of “de-risking,” or removing access to funds for businesses with a perceived risk of money laundering or terror financing.

Harry Winston Diamonds Shine in $7M Auction

Bonhams garnered $7.2 million (GBP 5 million) at its jewelry auction this month in London, where it noted a strong interest in diamonds as well as pink and blue sapphires.

The top lot was a step-cut, 15.52-carat, D, VVS2 diamond ring by Harry Winston. It sold for $1.6 million (GBP 1.1 million), or $101,500 per carat, exceeding the upper pre-sale estimate of $1.3 million (GBP 900,000).A pair of marquise and pear-shaped diamond earrings, also by Harry Winston, weighing 25.37 carats, fetched $384,000 (GBP 266,500).

De Beers IIDGR Diamond Grading Reports on RapNet

Grading reports from De Beers International Institute of Diamond Grading and Research (IIDGR) laboratories can now be uploaded to RapNet – Rapaport’s Diamond Trading Network.

De Beers noted IIDGR becomes one of only a handful of grading laboratories to have its reports listed on RapNet. IIDGR launched its generic diamond grading program earlier this year, extending its grading activity with the De Beers Forevermark brand.

RETAIL & WHOLESALE 	  

U.S. Jewelry Prices Drop for First Time in Five Months

The U.S. consumer price index (CPI) for jewelry fell 3% in March, halting an uptrend in the four months to February, according to the U.S. Bureau of Labor Statistics.

However, even though the CPI for jewelry rose 9% between November and February, it was in a steady downtrend for most of 2015. Compared to last year, the figure for March was 3% higher than 12 months ago. The March CPI for watches also declined 4% but remained up 5% from a year earlier.

U.S. Consumers Less Optimistic in April

U.S. consumer confidence declined slightly in April as the outlook for the labor market was less favorable, according to The Conference Board’s monthly report. The Conference Board Consumer Confidence Index stood at 94.2 in April, down 2 percent from its March reading of 96.1.

Consumer assessment about current conditions improved but expectations regarding the short-term have moderated, said Lynn Franco, director of economic indicators at The Conference Board. The report suggested fewer consumers anticipate improvement in the job market in the coming months. Consumers were also more pessimistic about business conditions.

Indian Government Forms Panel for Controversial Tax

India’s Ministry of Finance has formed a sub-committee to oversee implementation of the 1% excise duty recently imposed on the jewelry industry. The ministry also deferred the deadline for jewelers to register with the central excise department to July 1, 2016, according to the Gem and Jewellery Export Promotion Council (GJEPC).

Ashok Lahiri, a former chief economic advisor to the government, will chair the five-person panel. Representatives from the trade will be coopted onto the committee in consultation with Lahiri.

Swiss Watch Exports Slump in March

Swiss watch exports fell 16% in March as orders from Hong Kong and the U.S. slumped. The value of wristwatch shipments stood at $1.4 billion (CHF 1.37 billion), the lowest for March since 2011. Volume dived 20%.

The retreat reflects continued pessimism in the Swiss industry, with a 2015 Deloitte report stressing increasing concern of the threat of smartwatches. The impact of a stronger Swiss franc and weaker demand from countries such as China is also problematic, according to Deloitte.

MINING 	  

Petra Diamonds 3Q Sales Rise in Buoyant Rough Market

Petra Diamonds raised its production target for fiscal 2016 as third-quarter sales jumped amid improving conditions in the rough market. Steps taken by major producers to reduce supply, lower prices of rough, and increase marketing and promotions helped lift trading, the diamond miner said.

Petra’s revenue surged 25% to $120.5 million in the three months to March 31 as the volume of sales rose 13% and rough prices climbed 3.5%. Output across its five mines soared 26% to 995,905 carats in the period, prompting Petra to raise its target to 3.6 to 3.65 million carats for the current fiscal year. Its previous guidance was for 3.3 to 3.4 million carats this year.

Rockwell Diamonds Sales Plunge in 4Q

Rockwell Diamonds reported sales slumped 45% to $7.1 million in its fiscal fourth quarter as the company has changed strategy at its South Africa-based operations. Production fell 33% to 4,714 carats.

A strategic review will see the company close its Saxendrift operation in May and recommission its Wouterspan project in the same month. A large proportion of the Saxendrift staff and equipment will be deployed at Wouterspan, the junior diamond miner said. Both projects are located at South Africa’s Middle Orange River.

Three Big Diamonds Found at Angola Lulo Project

Lucapa Diamond Company recovered three more large diamonds during trial mining at its Lulo alluvial project in Angola. Two of the gems are high-color white type IIa diamonds, one weighing 88 carats and the other 30 carats.

They join the ranks of 10 “special” stones weighing more than 10.8 carats and found in the E46 area at Lulo since trial mining began in March. Lucapa reported more than 30% of the diamonds above 1-carat recovered in the E46 project are type IIa, the highest level of purity in a rough diamond.

GENERAL 	  

De Beers to Move From Prestigious Premises in 2017

De Beers is moving from its iconic premises at 17 Charterhouse Street as part of an ongoing consolidation at its parent Anglo American, the company’s spokesperson confirmed to Rapaport News.

Staff will relocate to Anglo American’s Carlton House Terrace office within the next year. Anglo American announced in December it plans to co-locate with De Beers in 2017 and was considering Charterhouse as its new headquarters. Instead it has now been decided De Beers will move to Anglo American’s premises.

Lab-Grown Diamond Association Adds Members

The International Grown Diamond Association (IGDA) has almost doubled its membership base since launching in February after reporting the addition of eight new companies to its ranks.

The new IGDA members include Numined Diamonds, Fair Trade Jewellery Co., The Gold Concept Jewelry and Design, Caraxy, M. Geller, Schubach Enterprises, D.NEA and DM Gems India. They join the IGDA to promote the so-called synthetic diamonds as a “new choice” to consumers.

Diamond Tracker Offers Sales, Inventory Insight

NPD Group, a market-data analysis company, introduced a service providing visibility into sales and inventory data across the global diamond industry. Diamond Tracker is the “first service” to offer insight into detailed point-of-sale information, monthly sales and inventory trends, NPD claimed.

Users are able to drill down into performance trends by specific diamond characteristics for both natural and lab-grown gems. It also tracks factors such as gemological labs, wholesale sources and different forms of purchase such as outright purchase, memo or recycled.

ECONWATCH 	  

Diamond Industry Stock Report

The major mining companies lost ground with Anglo American (-11.9%) leading the slump. Rio Tinto posted a double-digit decline, while Petra Diamonds fell despite its positive trading report. Far East retail was mixed with Chow Sang Sang posting the strongest gains (+3.3%). Among the Indian retailers, Gitanjali continued its volatility with declines (-5.5%) wiping out some of last week’s gains.

View the detailed industry stock report.
Apr. 27 (09:15 GMT) Apr. 21 (12:24 GMT) Chng.
$1 = Euro 0.88 0.88 0.00
$1 = Rupee 66.42 66.28 0.14
$1 = Israel Shekel 3.77 3.76 0.01
$1 = Rand 14.41 14.21 0.20
$1 = Canadian Dollar 1.26 1.26 0.00

Precious Metals Chng.
Gold $1,246.15 $1,265.75 -$19.60 -1.5%
Platinum $1,018.00 $1,036.95 -$18.95 -1.8%
Silver $17.34 $17.63 -$0.29 -1.6%

Stock Indexes Chng.
BSE 26,055.58 25,880.38 175.20 0.7%
Dow Jones 17,990.32 18,096.27 -105.95 -0.6%
FTSE 6,274.94 6,370.76 -95.82 -1.5%
Hang Seng 21,361.60 21,622.25 -260.65 -1.2%
S&P 500 2,091.70 2,102.40 -10.70 -0.5%
Yahoo! Jewelry 1,109.20 1,128.90 -19.70 -1.7%