Issue 4.1, January 2013

Issue 3.1, H1 2012
The Bourse
THE BOURSE
Issue 4.1, January 2013
Dear Colleagues,
The year 2013 has kicked off with a lot of enthusiasm and activity at the DDE with a Rough Tender and Rapaport
Polished Auction already concluded and a visit from the New York Diamond Dealers Club on the horizon.
Dubai Rough Trade grows in 2012
Rough Trade 2012
According to statistics from RapNet, rough
diamonds in the three leading centres traded at a
value of US$ 54 billion. The largest importer of
rough diamonds was India and Dubai accounted
for 19% of its import value. India’s import value
for 2012 was US$14.9 billion which represents a
5% increase in comparison to 2011.
In Dubai, trade volume of rough diamonds
increased by 23% from 2011 to 2012 to 121
million carats, and the value increased by 22% to
US$ 11.5 billion. The total carats imported in
2012 were 60 million at a value of US$ 4.6
billion, while export was at 61 million carats at a
value of US$ 6.9 billion. The highest trading
month was September at US$ 1.2 billion with a
weight of 13.2 million carats, which was 57%
more than August – the month with the least
trade value.
Source: Rapnet and Kimberley Process, Dubai
Dubai’s top importing trade partners in carats
and trade value were India, Zimbabwe and the
Democratic Republic of Congo, while the top
exporting countries by carats and value were
Switzerland, India, and Hong Kong.
South Africa, India and Switzerland accounted
for 45% of the total trade value of rough
diamonds traded through Dubai in 2012. India
regained its position as Dubai’s top trading
partner by making up 32% of the overall trade.
Source: Kimberley Process, Dubai
Issue 4.1, January 2013
The Bourse
DDE Rough Tender Update
The January Rough Diamond
Tender featured 6,500 Carats of
rough diamonds from Tanzania,
Congo and Zimbabwe ranging
from pointers to 10 carats.
The next Rough Diamond
Tender is scheduled from the
th
th
24 to the 28 of February.
Diamond price forecast
Bank of America Merrill Lynch predicts that diamond
prices will increase by approximately 2.1% this year
compared to a 14% drop in 2012 after a “correction” in
the market.
Jason Fairclough from BoAML highlights, “We forecast
a deficit in the medium to long term. Chinese per
capita consumption of diamonds is increasing but lags
well behind developed markets. We expect rising
demand from the emerging markets to drive global
demand growth”.
As highlighted by Rapaport, certified polished diamond
prices fell in 2012 as a result of the slow global
economic growth, slow pace of growth in China and
unfavorable short term economic policies in India.
Steady U.S. demand sustained the jewellery
industry ‎but consumer sentiment was bearish in
December as pending tax hikes reduced holiday ‎retail
spending.‎
Rapaport Auction
“Supply is very limited; no new large mines have come
on stream in the past five years and few Greenfield
mines are planned,” Fairclough says. Source: “Diamond
Intelligence Brief, Vol.28”.
Polished prices
For the full year 2012, RAPI for 1-carat diamonds fell
12.5%, while 0.3-carat ‎stones declined 7.4% and 0.5carat diamonds decreased by 11.1%. RAPI for ‎3-carat
stones fell 11.6% during the year. The Rapaport
Melee Index (RMI) ‎increased by 2.3% in 2012. ‎
RapNet Diamond Index (RAPI)
December
4Q 2012
2012
RAPI 0.3 Ct.
1.2%
1.3%
RAPI 0.5 Ct.
0.4%
-1.4%
RAPI 1.0 Ct.
0.0%
-2.6%
RAPI 3.0 Ct
0.2%
-1.7%
RMI (Melee)
-0.2%
Full Year
2012
-7.4%
-11.1%
-12.5%
-11.6%
2.3%
Source: Rapaport
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Rapaport held its first Melee Auction of the year in
Dubai from 20-23 January at the Almas Tower, Level 2
DDE Conference Room. The auction featured mixed,
breakout, close-out, and finely assorted diamond
parcels in all shapes, qualities and sizes.
Issue 4.1, January 2013
The Bourse
Peter Meeus, Chairman, DDE
Introduces the Dubai Diamond Conference
“The Dubai Diamond Conference is going to be a game changing
conference because 2012 brought the most amount of changes in the
diamond industry in the last 20 years. Of particular importance is the move
of the DTC headquarters from London to Gaborone (Botswana). This means
after 82 years of the sightholders going to London for the sights, from
September they will need to go to Gaborone in the middle of southern Africa
to view and buy the goods. One cannot underestimate the impact this move
will have on global trade centres.
For the conference we have three components, the first is under the title of
the New Silk Route to highlight Africa which produces 65% of the Rough
mined. The second is the diamond retail sector which will feature big
regional retailers and include an in-depth focus on the importance of tourism
in Dubai. The third component is a session on banking and finance; as one
of the key factors that enables the diamond industry to thrive, which is
currently scarce because of the current state of the global economy.”
For more details visit www.diamondconference.ae
Key Speakers at the Dubai Diamond Conference 2013
In line with the Kimberley Process’ (‘KP’) upcoming 10 year anniversary, the KP Chair Ambassador, Welile
Nhlapo has confirmed that he will be delivering a keynote speech at the inaugural Dubai Diamond Conference.
CHAIM EVEN-ZOHAR
Editor
Diamond Intelligence Briefs
Ahmed Bin Sulayem
Executive Chairman
Dubai Multi Commodities Centre
HON. DR. OBERT MOSES MPOFU
Minister of Mines and Mining Development
Republic of Zimbabwe
ERNEST BLOM
Honorary Life President of World
Federation of Diamond Bourses
ELI IZHAKOFF
President, World
Diamond Council
HON. PROF. DR FRANCISCO HON. ONKOKAME KITSO MOKAILA
HON. ISAK KATALI
QUEIROZ
Minister of Minerals, Energy and
Minister of Mines and Energy
Minister of Geology, Mines and
Water Resources, Republic of
Republic of Namibia
Industry, Republic of Angola
Botswana
“Dubai has seen remarkable growth in the past ten years, particularly within the diamond
industry. Located at the centre of the New Silk Route, it is certainly the ideal destination
for an international diamond conference and I am delighted to attend the inaugural Dubai
Diamond Conference on behalf of the Republic of South Africa. I look forward to the
range of debates and panel discussions that are in store, as well as identifying more
ways in which South Africa and the UAE can strengthen their trading ties.”
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HON. SUSAN SHABANGU
Minister of Mineral Resources
Republic of South Africa
The Bourse
Issue 4.1, January 2013
International Market News
Harry Winston Retail to be sold to Swatch
The diamond and timepiece division of Harry Winston
Diamond Corp. will be sold to ‎the Swatch Group for US$
1 billion; the structure of the deal consists of US$ 750
million in cash and debt ‎repayment of US$ 250 million.
Once the deal is complete, Harry Winston will change its
name to Dominion Diamond Corporation. As the diamond
industry continues to struggle with the availability of
finance, the finance derived from deal will enable Harry
Winston to concentrate more on upstream opportunities.
In 2012, India’s polished exports declined 37% year on
year to US$ 16.986 billion with the average price of the
polished exports up 15% to US$ 504.94 per carat.
Polished imports decreased 72% to US$ 5.592 billion in
2012. It can be concluded that the weak demand from
the US, China and Europe markets and the import duty
on polished diamond acted as bottle necks in the 2012
trade in India. Source: GJEPC.org
Surat Dealers Increases Manufacturing of Fancy Cut
Source: uk.reuters.com
De Beers eyes Angola as a country of focus
De Beers prioritises its exploration activities in Angola and
expects to unveil an economically viable diamond deposit
that will help the company regain the almost US$ 250
million spent on its search for diamonds in the country. De
Beers has allocated an annual budget of US$ 30 million
for prospecting in Angola, which in 2011 produced 8.32
million carats of diamonds at a value of US$ 1.16
billion. Source: rapnet.com
Bloomberg reported De Beers has also found diamonds
in a 3,000 square-kilometre concession close to Lucapa
in the Luanda North province. This is the last remaining
site out of the five that De Beers has explored in Angola
since 2005. Lago de Carvalho, business manager at De
Beers Angola, has emphasized the discovery is still in the
exploration phase. Source: Bloomberg.com
GJEPC proposes to the government of India Duty
Free Import Quota for Polished Diamonds
The Gem & Jewellery Export Promotion Council (GJEPC)
have made a request to the government of India to
authorize duty free import quotas for cut and polished
diamonds to 15% of the previous year’s exports. This is
as a response to the decrease in trade activity due to the
2% duty levy introduced on polished diamonds after more
than five years of duty free imports.
“We have gone with a suggestion that didn't permit
unlimited [polished] import at zero percent duty but did
permit us at least 15% of our previous year’s turnover at
0%,” said Pankaj Parekh, GJEPC’s vice chairman at a
conference in Mumbai.
4
In the past year, the price of round and princess cut
polished diamonds has fallen by approximately 15 to
20%, while fancy cut diamond prices have remained
relatively more stable. According to diamantaires in
Surat, the consumer trend has shifted more towards
pears, hearts, radiants, ovals, marquise, emerald,
asscher and cushion. This has triggered the
diamantaires in Surat (the world’s largest cutting and
polishing centre) to engage more in manufacturing of
fancy cut diamonds which have a market value of US$
10 billion.
Surat's diamond industry accounts for about 80% of
global fancy cut diamond supplies. Praveen Nanavaty,
the chairman of SHE Jewels, said, "Prices of fancy cut
diamonds are relatively stable compared to the rounds.
There is a decline of 15 to 20% in the price of rough
diamonds. Fancy cut diamonds are in high demand in
the world markets. Previously, round diamonds were
ruling the global market. Now, out of the 10 pieces of
diamonds sold in the world, two are fancy cut
diamonds."
"Small diamantaires have embarked upon processing
fancy cut diamonds as the round diamonds market is
relatively on the downside," said Dinesh Navadia,
the president of the Surat Diamond Association (SDA).
Nanavaty explains the diamonds from the mines are
sorted by the shape. He highlights that there is 70%
waste in processing round cuts, while the fancy cuts
have a lesser waste of 10 to 15%. He also says the
time, skill and per piece wages required for cutting and
polishing the fancy cuts are much less than with round
which require greater precision. Source: rapnet.com
Issue 4.1, January 2013
The Bourse
Calendar of Events – Q1 2013
February
Rough Tender:
GIA Jewelry Professional Diploma:
Diamond Dealer Days:
Coffee Club:
24 – 28
3–7
11 – 14
27
March
Dubai Diamond Conference:
Rough Tender:
U
P
D
A
T
E
18 – 19
31 Mar – 4 April
In 2012, the UAE Kimberley
Process Office issued a total of
9,921 trade (Import + Export)
certificates, which was a 32%
increase from 2011.
Highlights from the January Coffee Clubs
Dubai Dealer Days @
the Dubai Diamond Exchange
Over 20 leading diamantaires from the New York
Diamond Dealers Club are coming to the Dubai
Diamond Exchange to showcase exclusive assortments
of wholesale polished diamonds.
We look forward to seeing you there.
Venue : Level 2, Almas Tower
Date
: 11 – 14 February
RSVP: +971 4 433 6703 or [email protected]
Thank you for attending the Coffee Clubs, the images are online on http://www.facebook.com/#!/jlt.dmcc?fref=ts
5
Almas Tower Level 2, Jumeirah Lakes Towers
PO Box: 48800 Dubai U.A.E
T. +971 4 433 67 11
F. +971 4 375 18 96
[email protected]
The Bourse
Issue 3.1, H1 2012