Markets turning cautious as rough prices soften in response to tighter credit and uncertain economic conditions. De Beers rough selling at low premiums, and even discounts, ahead of next week’s DTC sight. Arjav rough auction sells 45% by lot. Polished prices soften. Buyers expecting lower prices but may be disappointed as Far East consumers expected to continue buying diamonds in spite of U.S. slowdown. Hong Kong’s 2Q polished imports +37% to $4.5B, polished exports +44% to $3.3B. Gitanjali Gems FY1Q revenues +39% to $573M, profits +57% to $27M. Sarin Technologies 2Q revenues +9% to $16M, profits +8% to $5M. Diamond industry broker Gerald Rothschild dies age 86.
Global Markets
United States: Sluggish economic data and political debate continue to affect confidence as retailers express concern that consumer spending may tighten in the coming months. Wholesalers report that demand has softened in the past few weeks but attribute the quieter market to the seasonal effects of the summer period. They note good demand for bread-and-butter 0.50-carat to 1.25-carat, VS-SI stones, which may be driven by shortages of supply, but demand for larger sizes remains weak.
Belgium: Activity remains quiet as most traders are on vacation until the bourse reopens on Monday, August 22. Dealers who have traveled abroad to buy goods have reported caution in the market, particularly from Mumbai. As a result, dealers remain uncertain how the market will develop when the bourse resumes official operations.
Israel: Trading is still slow as the bourse remains closed for the three-week summer break. Activity is expected to quickly return to normal next week as businesses reopen and begin their preparations for the September Hong Kong show. There is a sense of relief among dealers that the market volatility occurred during the vacation period. Traders appear confident that polished prices will remain stable in the coming month, and believe that the recent declines were a temporary correction.
India: Polished trading has slowed significantly with tightened liquidity and heightened uncertainty. Prices have softened in the past week. Trading was also impacted by the shorter work-week due to a local festival on Saturday and the Independence Day public holiday on August 15. Polished buyers have grown cautious and have opted to wait and see if prices will continue to drop before committing to a purchase. There remains good demand and trading of star and melee goods, 0.02-carat to 0.18-carat stones. The rough market remains quiet as dealers are hesitant to sell-off their inventories while prices are declining. Premiums on DTC boxes are low ahead of next week’s sight and activity on the secondary market is slow.
China: Wholesale trading remains quiet as buyers remain cautious about high prices. Retailers have held back on making large inventory purchases as they expect prices to soften. While August is generally a slow retail period, trading activity is expected to increase in the coming weeks as retailers start preparations for the National Day Golden Week holiday retail season, which starts on October 1.
Hong Kong: Diamond trading is steady but quiet over the summer period. Buyers appear cautious about the market and the impact that the weak economic outlook will have on diamond prices. Still, business activity is taking place, mainly to fill specific orders as buyers continue to avoid large inventory purchases through the summer and in the current price environment.
Tuesday, August 23, 2011
India's Diamond Jewelry Manufacturers Looking to Cut Gold Content as Prices Climb
The ever-increasing price of gold (the precious metal hit a record high on August 11, 2011) is prompting Indian jewelry manufacturers to seek ways of reducing the amount of gold used in diamond jewelry while retaining the jewels' look, feel, and value, the Business Standard reports.
While gold should comprise some 35% of a piece of jewelry's weight, some manufacturers have reduced gold use in their jewelry to as low as 12%.
The Standard quoted Vijay Jain of the Orra diamond jewelry company, who explained that the use of certain machines in manufacturing diamond-studded gold jewelry could reduce gold content by 10-15%. Jain also said that the machine-made jewelry was more durable and featured a better finish.
While gold should comprise some 35% of a piece of jewelry's weight, some manufacturers have reduced gold use in their jewelry to as low as 12%.
The Standard quoted Vijay Jain of the Orra diamond jewelry company, who explained that the use of certain machines in manufacturing diamond-studded gold jewelry could reduce gold content by 10-15%. Jain also said that the machine-made jewelry was more durable and featured a better finish.
Thursday, October 14, 2010
Signficant Increase In Demand For Rough Diamonds
The demand for rough diamonds is rising at a fast pace, up significantly from the 2008-2009 season. Because of the significant increase in demand, prices are going up, too.
Prices have gone up almost 15 to 20 percent from pre-recession levels. Sales worldwide in places like the United States and China have all increased, says The Times of India. Producers like De Beers cut output and rebuilt their stockpiles.
Dealers in Antwerp and Dubai have increased their diamond prices by approximately 3 percent in anticipation for diamonds from a key diamond producing location in Surat, India in time for the holiday season coming up in a couple months.
India's diamond trade in 2010 has already passed 2008 levels of the same time frame, according to data from the Gems and Jewelry Export Promotion Council (GJEPC).
According to The Hindu Business Line, the demand for rough diamonds faced a sharp decline in 2008-2009 but have since increased month to month for most of 2009-2010.
Dinesh Navadia, President of the Surat Diamond Association (SDA) said that the recession has taught diamond manufacturers that they shouldn't hold too many rough diamonds in their inventory because overproduction hurts their business.
The ICRA, a credit rating agency, reveals a report that counters that, saying that there's been a significant increase because of efforts by mining companies to push supply cutbacks.
To continue positive efforts in the rough diamond industry, the Surat diamond industry, which according to The Economic Times, is responsible for 9 out of 11 diamonds in the world, has 500 units (of 4,500) that would like to form a company to source rough gems and stones from mines in Africa, Russian, Australia and Canada. This newly formed Surat Diamond Sourcing India Ltd (SDSIL) company would challenge companies like De Beers, Alosa, and Rio Tinto.
Vice-president of Southern Gujarat Chamber of Commerce & Industry (SGCCI) Rohit Mehta said, "SDSIL would sell diamonds at the highest price and offer the benefit to the shareholders."
Simona Kogan
Tuesday, October 5, 2010
E-retail growth set to slow
Following a decade of rapid growth, online shopping is set to slow down significantly as the channel matures and competition increases. Furthermore the high spending young family shopper is the one most likely to curb spending as government cutbacks begin to bite. Retailers will have to work much harder to win and keep online customers says Verdict.
At the e-Retail 2010 and Beyond* conference this morning the independent retail analyst revealed that although online expenditure will increase by more than 56% to £35 billion by 2014, and will continue to outperform total retail, growth will slow considerably from previous years – indeed Verdict forecasts average annual growth between 2009 and 2014 will be 12% compared with an average of 35% per annum over the previous decade.
Moreover the most valuable and prolific shopper group, the 35-44 year olds, currently spending £6.2 billion online, and accounting for a over a third of online retail expenditure in 2009, are the ones most likely to cut back on spending.
The number of online shoppers is also heading for saturation – though Verdict predicts numbers will rise to 32.5 million in 2014 this will be only another four million shoppers, and their spend will be spread over far more websites as the number of retailers online continues to increase rapidly.
Malcolm Pinkerton, senior retail analyst said: “With the number of people shopping online becoming highly saturated, retailers will have to change and evolve their online strategies. Driving loyalty and increasing spend per head across all age groups will become vital factors to ensure growth.”
Driving higher spend from all demographic groups
The highest current spenders on line are the 34-44 year olds (£992 per head per year) followed by the 25-34 year olds (£806 per head). By tailoring both service and product range towards other, currently under spending age groups, retailers can maximise their online potential.
Furthermore physical retailers are at an advantage; Verdict’s research reveals 14 out of the Top 20 most used shopping sites belong to physical retailers and as a retailer’s multi channel shopper is the most valuable (because they spend well above the average), encouraging existing customers online and acquiring new online customers offers a clear opportunity.
It is the shoppers in the 15-24 and 55+ age groups which show the most growth potential. A third of shoppers aged 15-24 said the inclusion of pictures and videos on a website are important and these are also prolific users of mobiles. Retailers would be wise to build this into their strategy as it will be those that do who stand the best chance of converting this age group into regular customers.
Meanwhile for the 55+s the convenience of shopping online linked to trusted retail brands is a key attraction, especially as they become more internet savvy. Ensuring a customer experience that meets their service expectations will be key to their loyalty.
Sarah Peters, senior retail analyst added “The online shopper is extremely valuable. Retailers have had it relatively easy online over the past decade because of the channel’s rapid growth and lack of competition, but just as in overall retail, the next five years will be much more challenging. If they plan their strategy now and understand the change in the competitive dynamics they will be able to ensure they profit as a result.”
At the e-Retail 2010 and Beyond* conference this morning the independent retail analyst revealed that although online expenditure will increase by more than 56% to £35 billion by 2014, and will continue to outperform total retail, growth will slow considerably from previous years – indeed Verdict forecasts average annual growth between 2009 and 2014 will be 12% compared with an average of 35% per annum over the previous decade.
Moreover the most valuable and prolific shopper group, the 35-44 year olds, currently spending £6.2 billion online, and accounting for a over a third of online retail expenditure in 2009, are the ones most likely to cut back on spending.
The number of online shoppers is also heading for saturation – though Verdict predicts numbers will rise to 32.5 million in 2014 this will be only another four million shoppers, and their spend will be spread over far more websites as the number of retailers online continues to increase rapidly.
Malcolm Pinkerton, senior retail analyst said: “With the number of people shopping online becoming highly saturated, retailers will have to change and evolve their online strategies. Driving loyalty and increasing spend per head across all age groups will become vital factors to ensure growth.”
Driving higher spend from all demographic groups
The highest current spenders on line are the 34-44 year olds (£992 per head per year) followed by the 25-34 year olds (£806 per head). By tailoring both service and product range towards other, currently under spending age groups, retailers can maximise their online potential.
Furthermore physical retailers are at an advantage; Verdict’s research reveals 14 out of the Top 20 most used shopping sites belong to physical retailers and as a retailer’s multi channel shopper is the most valuable (because they spend well above the average), encouraging existing customers online and acquiring new online customers offers a clear opportunity.
It is the shoppers in the 15-24 and 55+ age groups which show the most growth potential. A third of shoppers aged 15-24 said the inclusion of pictures and videos on a website are important and these are also prolific users of mobiles. Retailers would be wise to build this into their strategy as it will be those that do who stand the best chance of converting this age group into regular customers.
Meanwhile for the 55+s the convenience of shopping online linked to trusted retail brands is a key attraction, especially as they become more internet savvy. Ensuring a customer experience that meets their service expectations will be key to their loyalty.
Sarah Peters, senior retail analyst added “The online shopper is extremely valuable. Retailers have had it relatively easy online over the past decade because of the channel’s rapid growth and lack of competition, but just as in overall retail, the next five years will be much more challenging. If they plan their strategy now and understand the change in the competitive dynamics they will be able to ensure they profit as a result.”
Tuesday, September 28, 2010
Over $10 million worth of diamonds sold in international auction in Hong Kong
On September 13-21, the 41st international auction to sell rough of special sizes was held during the Hong Kong Jewellery Fair.
33 companies from Hong Kong, Israel, Belgium, and India were invited; and 24 of them took part in the auction.
1605.54 carats of ALROSA’S rough was put out (89 lots), including 3 diamonds over 50 carats each. The biggest rough diamond put out to be auctioned weighed 95.77 carats.
81 lots were sold, with the sales total of USD10.20 million.
79 polished diamonds were put out at the polished auction, with the total weight of 286.00 carats. The biggest polished stone weighed 9.04 carats; and the most expensive one weighed 4.01 carats and cost USD52,089 per carat.
33 companies from the continental part of China, Hong Kong, India, Israel, the USA, Belgium, and Thailand took part in the polished auction.
In total, 69 polished diamonds were sold, with the total weight of 264.66 carats to the amount of USD3,323 thousand.
The companies invited by ALROSA to the rough and polished auctions participated actively. Their bids testified to selective demand for diamond products and high clients’ interest to rough and polished of fancy colors.
33 companies from Hong Kong, Israel, Belgium, and India were invited; and 24 of them took part in the auction.
1605.54 carats of ALROSA’S rough was put out (89 lots), including 3 diamonds over 50 carats each. The biggest rough diamond put out to be auctioned weighed 95.77 carats.
81 lots were sold, with the sales total of USD10.20 million.
79 polished diamonds were put out at the polished auction, with the total weight of 286.00 carats. The biggest polished stone weighed 9.04 carats; and the most expensive one weighed 4.01 carats and cost USD52,089 per carat.
33 companies from the continental part of China, Hong Kong, India, Israel, the USA, Belgium, and Thailand took part in the polished auction.
In total, 69 polished diamonds were sold, with the total weight of 264.66 carats to the amount of USD3,323 thousand.
The companies invited by ALROSA to the rough and polished auctions participated actively. Their bids testified to selective demand for diamond products and high clients’ interest to rough and polished of fancy colors.
Tuesday, September 21, 2010
Gold Sets New Record
Update: Gold inched above its previous record in early morning trading today to set a new high at $1,284.70 per ounce in London. Gold has been trading close to the $1,200 mark all month, so despite a string of records in the past week it is up only 4.3 percent in the past 30 days. The metal has risen 27 percent from one year ago. In other news this morning, silver added 14-cents at $20.91 per ounce and platinum is up $13 to $1,626 per ounce. The dollar is stable againsts major diamond trading center currencies: $1 = INR 45.69, $1 = EUR 0.76, $1 = JPY 85.7, $1 = CAD 1.04, $1 = ZAR 7.13.
Tuesday, September 7, 2010
Millionaire banker is Barclays boss
An American-born banker whose multimillion-pound pay rewards fuelled anger against the banking sector has been named in the top job at Barclays.
Bob Diamond will take over from chief executive John Varley in March after a 14-year spell with Barclays that has seen him turn its investment banking arm from scratch into a business so large it generates more than 80% of the bank's total profits.
The 59-year-old, one of the world's richest bankers, will be paid a £1.35 million annual salary, up from the current £250,000, and stands to receive potential bonuses worth another £10 million.
In a day of upheaval in the banking sector, HSBC executive chairman Stephen Green also announced plans to step down in favour of a role in David Cameron's government. Mr Green, who has been chairman since 2005, will replace Lord Davies, the former Standard Chartered boss, as Trade Minister.
Mr Diamond said he was "honoured" to take on the new role, but the move is likely to enrage some politicians and union leaders. Many consider Mr Diamond - with an estimated worth of £95 million - to be the epitome of the excessive bonus culture.
Although he waived his bonus last year after widespread criticism of bankers, he received £26 million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to America's BlackRock.
Mr Diamond was criticised in April by politicians including Lord Mandelson and Vince Cable when it was claimed he received £63 million under a reward scheme.
In his new role, Mr Diamond will receive an annual bonus of £3.375 million on top of his salary, as well as a long-term performance-based incentive worth up to £6.75 million.
Paul Kenny, general secretary of the GMB union, said the appointment was "insulting", adding: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them.
"This is about as insulting and divisive as it gets. A person who poured petrol on the flames of the fires in the financial system has been rewarded rather than been punished for what he did."
Bob Diamond will take over from chief executive John Varley in March after a 14-year spell with Barclays that has seen him turn its investment banking arm from scratch into a business so large it generates more than 80% of the bank's total profits.
The 59-year-old, one of the world's richest bankers, will be paid a £1.35 million annual salary, up from the current £250,000, and stands to receive potential bonuses worth another £10 million.
In a day of upheaval in the banking sector, HSBC executive chairman Stephen Green also announced plans to step down in favour of a role in David Cameron's government. Mr Green, who has been chairman since 2005, will replace Lord Davies, the former Standard Chartered boss, as Trade Minister.
Mr Diamond said he was "honoured" to take on the new role, but the move is likely to enrage some politicians and union leaders. Many consider Mr Diamond - with an estimated worth of £95 million - to be the epitome of the excessive bonus culture.
Although he waived his bonus last year after widespread criticism of bankers, he received £26 million for his shares in Barclays Global Investors, the bank's fund management business, when it was sold to America's BlackRock.
Mr Diamond was criticised in April by politicians including Lord Mandelson and Vince Cable when it was claimed he received £63 million under a reward scheme.
In his new role, Mr Diamond will receive an annual bonus of £3.375 million on top of his salary, as well as a long-term performance-based incentive worth up to £6.75 million.
Paul Kenny, general secretary of the GMB union, said the appointment was "insulting", adding: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them.
"This is about as insulting and divisive as it gets. A person who poured petrol on the flames of the fires in the financial system has been rewarded rather than been punished for what he did."
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