Diamond market overview
Traders reported a quiet week of trading with many offices closed for the Jewish holidays. The main focus is on the US market, where jewellery retailers are preparing for the end of year holiday sales. Traders said overall demand was healthy, but that a real pick up in orders ahead of the Christmas sales season had yet to materialize. “Hopefully we will see traffic increase for the pre-Christmas sales”, one trader said. In the broader market, the main polishedprices index ended the week lower at 124.90, from Monday’s opening at 126.00.
Sentiment in the rough market remained depressed. Some traders said price cuts by Alrosa and De Beers were positive, but that the weakness in demand continued, amid high stock levels and tight liquidity. Meanwhile, RBC Capital Markets said in a research note this past week that surplus polished and rough will likely keep prices under pressure. “The long-held view of a shortage of rough when compared with demand has been pushed out as new producers ramp up and Chinese retailers destock,” RBC Capital Market said.
Corporate and events
The value of rough diamonds exports from Botswana’s mines fell 15 percent in the first six months of the year to $1.7 billion, official data showed, Reuters reported. Diamond exports contribute 30 percent to the GDP of the southern African nation. But diamond demand has slowed since late 2014 as middlemen who buy rough stones struggle with a stronger dollar and liquidity problems, according to the Reuters report.
Diamond supplier De Beers expects the value of its sales of the polished jewel in China may rise this year by just more than a tenth of 2011’s surge, as the economy that has long bolstered global luxury goods heads for its weakest growth in 25 years, Business Day reported. The world’s largest diamond producer by value expects 2015 China polished diamond sales to rise 3%-5% in US dollar terms, Stephen Lussier, head of its Forevermark brand, said in a recent interview. They grew 5% last year, down from 29% four years ago and 33% in 2010, said the Business Day report.
llicit trafficking of diamonds in the Central African Republic has helped finance a more than two-year conflict, which has flared up again as the fiercest bout of fighting in the capital in a year has left more than 50 people dead, Amnesty International said, Bloomberg reported. Traders who have bought diamonds worth “several million dollars” failed to investigate if the beneficiaries are armed groups who carry out executions, rape and looting, the London-based rights group said Wednesday in a report, according to the Bloomberg report. Local companies could soon begin exporting stockpiled gems that may have been mined by child labourers and avoided taxes, said the Bloomberg report.
The destruction of 95% of South Africa’s once-buoyant diamond cutting and polishing industry showed once again that governments could not micromanage businesses and should not try to do so, Democratic Alliance (DA) Shadow Mineral Resources Minister James Lorimer said, miningweekly.com reported. The Opposition Shadow Minister stated in a media release that his party was appalled by the news that the last, biggest diamond cutting and polishing company in South Africa – Zlotowski Diamond Cutting Works, a subsidiary of Chow Tai Fook of Hong Kong – was closing, said the miningweekly.com report.