News – Page 90 – The Diamond Certification Laboratory of Australia (DCLA)

Virus Likely to Impact Demand at De Beers Sight

De Beers and its clients expect a slowdown in rough-diamond sales at the company’s Botswana sight this week amid concerns about the coronavirus.

“It’s fair to say there will be an impact on rough demand in the short term,” De Beers chief financial officer Nimesh Patel said Thursday in an interview with Rapaport News. “I’d expect we’d see that at the [February] sight.”

The downturn in China’s retail market due to the virus outbreak has left manufacturers uncertain how long it will take them to sell diamonds they cut. Companies that supply to that region have been especially affected.

Rough that can produce polished with clarity above VS has shown weakness in recent tenders due to the lower Chinese demand, one sightholder said on condition of anonymity. Lower-clarity items destined for the American market have performed better, he added.

“It’s a mixed picture,” the sightholder explained. “People that are strongly focused on the Far East will be reluctant to buy, while those that work with the US and maybe Europe still seem to be going OK.”

De Beers will hold back goods rather than lowering prices, the dealer added, predicting that the sight would be small in value. The miner has kept prices stable for the sale, which began Monday, two sightholders confirmed with Rapaport News.

Another De Beers client expected buyers would take up most of their allocations at this sight, but said the next sale beginning March 30 would be weak if the coronavirus difficulties were still going on.

“I’m hopeful this crisis might not last more than two or three weeks,” he said.

Meanwhile, Patel pointed out that some goods could be rerouted from China to other markets, while certain constant sources of demand, such as weddings, would be delayed rather than disappearing completely. In addition, the midstream has started the year with relatively low inventories due to a reasonably strong fourth-quarter holiday season, putting it in a good position to weather the difficulties, he said.

“We’ve been through periods like this before in the industry,” the executive said. “This is, hopefully, a one-off impact, and the sooner the virus can be contained, and the sooner we can get back to the normal operation of those economies, the better.”

Source: Diamonds.net

A laser code could protect your diamond ring and save you thousands

Replacing a diamond ring can be an expensive prospect, but that’s the reality for the majority of Australians who don’t insure their heirlooms.

Diamond engagement rings are a big deal for many Australians, but very few are protected from would-be thieves.

Insuring diamond rings is expensive, which is why 44 per cent of Australians’ diamond rings remain uninsured. Of those that are insured, 70 per cent are inadequately insured.

That is, the rings are insured under a household policy that, in many cases, leaves the diamond vulnerable.

These policies do not cover rings taken out of the home, and most policies do not cover the expense of a diamond ring replacement.

The reason behind the expense is because untraceable diamonds are easily stolen and then on-sold at a higher price, but there is now a solution.

Diamond rings in Australia now contain a laser code that is etched in the diamond.

The code makes the rings a “low risk” theft item because they are easily traceable by police.

Certified Diamond Insurance (CDI) etches the secret antitheft serial number onto the diamonds and makes them traceable.

The insurance comes from a partnership between the Diamond Certification Laboratory of Australia and the Woodina Underwiting Agency.

CDI founding partner and head of speciality risks at Woodina, Isaac Garson, said the code was a game-changer.

“We are putting thieves and fraudsters on notice,” he said.

Now the CDI has begun work on a national database to return stolen or lost rings to their rightful owners.

“If they steal a certified diamond ring insured with CDI, it will be much more difficult to sell because the diamond’s unique ‘fingerprint’ is traceable and would be registered on a central database,” Mr Garson said.

This decreases a ring’s value on the black market as it is more difficult to move, but many older rings do not have the code.

“Many older engagement rings do not have this vital ‘fingerprint’ that make diamonds traceable,” Mr Garson said.

Mr Garson said families with expensive diamond heirlooms should get a diamond ring certification in their annual diamond check-up.

“Just like cars need an annual service to make them roadworthy so too do diamond rings,” he said.

Source: News.com.au

Alrosa finds first large coloured diamond at new Yakutia mine

17.44 carat diamond found at the Verkhne-Munskoye deposit

Russia’s Alrosa, the world’s top diamond miner by output, has found a 17.4-carat bright yellow gem-quality precious rock at its new Verkhne-Munskoye deposit in Yakutia, which started operations in 2018.

The diamond, recovered in mid-February from the Zapolyarnaya kimberlite pipe, is the first large coloured stone found at the site, the company said.

Alrosa, which did not disclose the estimated value of the diamond, said it would be assessed and evaluated by its experts in coming days.

Diamond miners and traders have been hit hard in the past year by weak market conditions. These factors have taken a major toll on producers of small stones due to an oversupply in that segment.

De Beers reported Thursday its worst set of earnings since Anglo American (LON:AAL) acquired it in 2012.

The world’s No. 1 diamond miner by market cap said demand for rough diamonds from polishers and cutters was weak last year due to the impact of US-China trade tension and the closure of US retail outlets. Many companies in the so-called midstream are struggling to obtain financing, it said.

Alrosa believes the situation is about to change as it’s already seeing the first signs of stabilization in the sector.

Increasing demand for synthetic diamonds has also weighed on prices. Man-made diamonds require less investment than mining natural stones and can offer more attractive margins.

Industry consultant Bain & Co., however, believes that while glut that’s depressing the diamond market will probably be cleared early this year, it will take at least another 12 months for the market to fully recover.

“The industry’s first and strongest opportunity to rebalance and regain growth will be 2021,” said Bain in a report released in December, adding that supply could fall 8% that year.

Source: mining.com

De Beers Optimistic After 2019 Earnings Slump

Rough and polished diamonds next to each other at De Beers

De Beers gave a positive outlook for 2020 due to an improvement in the industry’s inventory situation, despite growing concerns about Chinese demand.

Early data from the holiday season indicate midstream stock levels are more balanced than they were, the company reported Thursday in parent company Anglo American’s annual financial results.

The miner maintained its production forecast of 32 million to 34 million carats for the year, citing a “currently anticipated improvement in trading conditions compared with 2019.”

Last year was the worst for De Beers in the past decade, as rough demand plummeted amid an oversupply of polished in the manufacturing and trading sector.

The miner reported that underlying earnings slid 87% to $45 million, while revenue fell 24% to $4.61 billion, its lowest level since the financial crisis.

Rough sales declined 26% to $4 billion, with volume down 8% to 30.9 million carats. De Beers’ average selling price slumped 20% to $137 per carat, reflecting a 6% decline in like-for-like rough prices, as well as weak demand for higher-value diamonds.

Sales from other divisions, which include the Element Six industrial-diamond unit and Lightbox, its lab-grown brand, fell 17% to approximately $570 million, according to Rapaport calculations.

Last year started on a weak note, as stock-market volatility and the US-China trade war led to sluggish 2018 holiday sales, leaving the trade with higher stock levels than it had expected, the company explained.

The situation worsened as US retailers took more goods on memo and pruned their physical-store networks, while consumers shifted further to online buying, reducing the need for inventory.

The midstream also suffered from tight bank financing, dampening demand for more rough, De Beers noted.

De Beers observed “stable” consumer demand so far in 2020, especially in the US, but cautioned that several uncertainties — including the coronavirus outbreak — could pose a threat.

An increase in online purchasing has caused retailers to destock, while US-China trade tensions and geopolitical escalations in the Middle East could also affect economic growth and consumer sentiment, the company added.

Source: Diamonds.net

The invisible engraving that could see you save hundreds of dollars on wedding ring insurance

Diamond grader Roy Cohen is urging Australians to get diamond rings engraved
He argued a serial number on diamond girdle could stop illegal pawn shop sale
Insurance premiums can also be reduced for jewellery inscribed with a code

A romantic marriage proposal is a significant milestone in many people’s lives.

Engagement rings can also cost tens of thousands of dollars and are commonly stolen in home invasions.

Jewellery experts are urging engaged couples to get the girdle of the diamond engraved so they can’t as easily be pawned.

This microscopic serial number could be enough to get the ring returned, and save newlyweds potentially hundreds of dollars a year in insurance premiums.

Roy Cohen, a third-generation diamond grader originally from South Africa, said these minute inscriptions increased the chance of a stolen ring being reunited with its rightful owner.

‘It’s invisible to the naked eye, it can only be seen with magnification but it’s basically a serial number,’ he told Daily Mail Australia.

‘Usually what happens is, at any pawn shop, they will take a jeweller’s loupe and they will actually have a look at the item.

‘If there’s a certificate number on the girdle of the diamond and the diamond’s been sold without the certificate, usually that does raise alarm bells.’

Mr Cohen, the director of Diamond Certification Laboratory of Australia, said engraved serial numbers on diamonds could be checked against a database, arguing this was more effective than leaving a diamond un-engraved and relying on police detective work to find a stolen item.

‘If somebody steals a diamond ring from a house in Sydney and then goes to sell it in Melbourne, there’s no way that they’re going to get found out because there’s not a lot of co-operation between states,’ he said.

His DCLA company began inscribing diamond rings in Australia in 2001, following his move from Johannesburg to Sydney.

It has now formed a partnership with underwriter Woodina to form Certified Diamond Insurance, which only insures jewellery with an inscribed serial number.

Mr Cohen, who has three decades of experience as a diamond grader, vowed customers could save up to 50 per cent off their premiums compared to traditional home and content packages.

A diamond ring worth $10,000 can be insured for $306 a year.

Jewellery is the third most stolen item stolen from Australian homes, after cash and laptops, an analysis of official burglary figures by insurer Budget Direct found.

Source: dailymail.co.uk

Retail margins could be boosting man-made diamond sales

Rough lab created diamonds left and natural Rough Diamonds right

Lower prices and marketed ethical and sustainable benefits relative to that of natural diamonds has been the prominent narrative around man-made diamonds, but a seemingly less obvious factor is also likely helping to drive the product: the profit margin they offer retailers.

When analysing the wholesale and retail prices of unbranded man-made and natural diamonds, it appears that the retail gross margin of man-made diamonds in popular carat-sizes is as much as 1.8-times that of natural diamonds.

To further quantify this, for example, in some cases a retailer would theoretically only have to sell US$5,000 worth of man-made diamonds to generate the same gross profit as selling almost $10,000 worth of equivalent natural diamonds. Here, “gross margin” is considered to be a retailer’s top-line profit when selling a diamond, that is the sales price relative to the wholesale cost of the diamond.

This is an important metric for a retailer selling both man-made and natural diamonds because the theoretical high gross profit margin of man-made diamonds serves as an implied incentivise to prioritise selling man-made diamonds over natural, as long as the profit margin differential remains in place.

Further, given that retailers are the direct point of contact between a consumer and a diamond, retailers may be more inclined to promote the beneficial attributes of a man-made stone over a natural, thereby influencing a customer’s longer-term perception of the products.

Despite the significant growth in the availability of man-made diamond jewellery in recent years, it is estimated that still only one in five diamond retailers in the US carry man-made diamonds; and outside of the US the figure is even (much) smaller.

Further, many of the jewellers and other retailers that do carry man-made diamonds only have limited inventory as customer appetite for the product is tested. This has perhaps allowed the few retailers that do carry man-made diamonds, especially those that are more fully stocked, to charge premiums.

Further, given the relatively lower-production costs of man-made diamonds compared to that of natural (especially notable in larger carat-sizes given that man-made diamonds are a manufactured good), it is theoretically more affordable for the supply chain to offer man-made diamonds to retailers on memo (consignments). With goods on consignment, retailers typically have lower, or zero, inventory capital costs and can therefore be more selective in offering discounts to the consumer, perhaps resulting in more resilient profit margins.

However, going forward, as the man-made diamond jewellery complex matures, as new producers and better production technology increases supply and as more retailers compete downstream, especially those selling unbranded goods, the product will likely become more commoditised. Resultantly, retail margins could erode and eventually fall to within that of natural diamonds or even lower.

Source: mining-journal

De Beers Adds Grading Specs for Lightbox

Lightbox has added grading information for its synthetic white diamonds in an effort by the De Beers brand to bring further transparency to the lab-grown sector.

The company will provide technical specifications showing the minimum quality of its stones across cut, color, clarity and carat weight, Lightbox said Monday. It will include these descriptions with each white lab-grown diamond it sells, but will not grade each stone individually. The specifications are based on internationally recognized grading standards, the De Beers-owned company noted.

“This new feature is just one more way Lightbox can instill consumer confidence,” the company added.

An infographic with the information is also available on Lightbox’s website. Those specifications list its synthetic white diamonds to be “near colorless” or better, which the company defines as between G to J, meaning only a trained gemologist can detect a trace of color. The stones all have a minimum clarity of VS, and a cut of “very good.” The stones are still priced at $800 per carat.

Lightbox, which De Beers launched in 2018, does not currently intend to offer grading information for its blue or pink lab-grown diamonds.

Source: Diamonds.net

ALROSA sells 6 carat pink diamond

ALROSA has sold its 6.21-carat cushion cut fancy intense pink purple diamond to Larry West, a New York-based collector of exclusive pink diamonds.

The stone originates from Yakutia, where it was discovered and polished by ALROSA.

For over 40 years, Larry J. West, the owner of New York’s L.J. West Diamonds, has been searching for an extraordinary natural color diamonds. His collection has been featured in Natural History Museum of Los Angeles County and at auctions worldwide.

“As global production declines, pink diamonds will become rarer and thus more valuable,” West said in a statement.

To establish provenance, the collector received an electronic passport from ALROSA that includes a detailed visual history of the diamond’s extraction and production, as well as information about the craftsman’s background.

As part of the company’s traceability initiative, a short film is automatically generated on ALROSA’s digital platform based on information about each diamond available for purchase.

In September, ALROSA hosted its annual auction of colored stones in Hong Kong and sold over 200 diamonds. All stones sold at the auction were accompanied by a digital passport that contained information about the diamond’s origin.

Source: mining.com

Gold Demand Lifts Mood at India Jewelry Show

Exhibitors at IIJS Signature in Mumbai expressed confidence India’s wedding tradition and enduring love of gold would help the nation’s jewelry industry overcome its current difficulties.

Economic uncertainty, high gold prices, tight regulation and the outbreak of the coronavirus in China have created challenges for the Indian jewelry sector, traders told Rapaport News during the fair, which ended Sunday at the Bombay Exhibition Centre. But fundamental features of the country’s consumer market should help limit the impact, dealers said.

“Gold prices have always gone up,” said Mitesh Gajera, a director at Laxmi Dia Jewel, a Mumbai-based manufacturer, retailer and wholesaler of jewelry. “Gold is a form of investment for Indian people. People trust in gold prices.”

The yellow metal has gained around 20% in value over the past year as investors view the commodity as a safe haven during global economic uncertainty. While that has dampened Indians’ ability to buy, many consumers still see it as a strong investment and even as a currency, with the price growth sometimes boosting their willingness to splurge before the rate increases further.

“In the middle of the night, if you want money, you can immediately get cash [in exchange for gold],” explained Anand Shah, a jewelry designer and owner of Anand Shah Jewels.

Lower price points

However, a shift by consumers toward pieces with less gold content and thinner profit margins for jewelers have offset the rise in gold demand over the past year, exhibitors said. India’s 12.5% import duty on the precious material has intensified the problem, Shah added. The government’s decision to maintain that rate — as well as a 7.5% levy on polished diamonds — in its annual budget earlier this month disappointed the trade, which had been campaigning for a reduction.

The state of the important bridal market also presents a complex mix of positive and negative trends. Suppliers at IIJS Signature reported a strong wedding period so far, with the season running from November until May, providing selling opportunities at the show.

But while Indian nuptials continue to feature bold displays of expensive jewelry, making it a constant source of demand, wedding budgets have decreased due to the sluggish economy. Diamond consumption has suffered as Indians opt for smaller jewelry, with the average Indian bride now wearing around 15 carats in total weight on her big day, compared with 30 carats two years ago, estimated Hardik Shah, the executive director of BR Designs, a Surat-based jewelry manufacturer and retailer.

Less diamond content

“People who would have bought a 10-carat [total weight] necklace [seven or eight months ago] will now buy 5 carats,” added Rhishabh Solanki, a director at jewelry manufacturer Shashat Impex.

Indians’ sacrifice of diamond quantity has been especially evident in the important southern Indian market — cities such as Chennai, Bangalore and Hyderabad — where the relatively educated population is known for being quality-conscious.

Consumers there are shifting to lower gold weights and fewer diamonds in their wedding jewelry, but aren’t compromising on color and clarity, according to Nilesh Soni, head of marketing for the southern region at Mumbai-based jewelry manufacturer Neo Diamonds. They’re still insisting on D-to-F, VVS diamonds, he observed, noting that his company’s sales at the show were mainly of mid-range wedding necklaces with those specifications, Soni reported.

“[Retailers] wouldn’t buy a very high-range [item] because it may sell or may not,” he explained. “The mid-range is a safe investment.”

Jewelry beats diamonds

Finished-jewelry suppliers accounted for the vast majority of exhibitors at IIJS Signature, and came away happier than the loose-diamond suppliers, of which there were only a handful. Some well-known diamond companies were present but displayed their jewelry instead of loose stones.

“For jewelry, the fair has been fantastic,” noted Hitesh Choksi, a sales executive at Hari Krishna Exports, which used the event to display both its diamonds and its finished jewelry. The company benefited from buyers carrying out their initial inquiries and purchases ahead of the festive season, which begins in August.

Sales of loose stones were more muted, as the Indian diamond market is less focused on domestic shows, Hitesh Choski explained. The goods that did sell were mainly in the 1- to 1.50-carat, I-to-K, VS-to-SI categories, as many buyers were from northern India, where consumers tend to choose larger but lower-quality diamonds, he noted. Another loose-diamond exhibitor reported making no sales across the entire event.

Regulatory creep

Aside from the relatively steep import duties, India’s jewelry industry is struggling with regulations designed to clean up the trade, such as a requirement from January 2021 for all gold to carry a hallmark. This type of restriction favors larger companies, according to Milan Choksi, a partner at Tanvirkumar & Company.

“Organized players get the opportunity to take business from those that cannot [handle] the regulations that you need to comply with,” Milan Choksi said. “There are too many things for a smaller business [to cope with], so they’ve had to drop parts of their business. These areas are available for us to capture.”

China impact

Compounding the difficulties is a volatile global situation, with the US-China trade war, protests in Hong Kong and now the coronavirus denting Indian exports. Last week, India’s Gem & Jewellery Export Promotion Council (GJEPC) warned that the near shutdown of business in greater China had threatened to delay payments to suppliers. The situation had a negative effect on morale at IIJS Signature, as some 35% to 40% of India’s gem and jewelry export business is with Hong Kong and mainland China, according to figures from the GJEPC.

While it’s too early to assess the full impact, “let’s assume it’s really bad and the next six months will be challenging for the Far East,” Milan Choksi warned.

However, India remains in a strong position on the global stage amid the turbulence, noted Abhishek Sand, a partner at Jaipur-based jewelry manufacturer Savio Jewellery. It enjoys a good relationship with the US and is likely to increase its trade with America, Sand explained. Meanwhile, some Chinese jewelry manufacturers are moving operations to India because of lower US tariffs and the coronavirus, he reported.

“There’s a liking of the American government toward India,” Sand noted. Trump doesn’t have a trade war with India, he stressed.

Source: Diamonds.net

Fancy Pink Diamonds Have Soared 116% in Value over the Past 10 Years

FANCY PINK DIAMONDS soared 116% in value over the past decade, outpacing blues (81%) and yellows (21%), according to a report by the Fancy Color Research Foundation (FCRF), an Israel-based group that tracks diamond pricing data in the global trading centers of Hong Kong, New York and Tel Aviv.

While the overall index for fancy-color diamonds — across all their brilliant hues — increased by 77% from 2009 to 2019, it was the pink diamond category that stood out in the report.

Market watchers believe that the strength of the pink-diamond segment is attributed to the expected closure this year of the Argyle Diamond Mine, which has been operating in Western Australia for the past 37 years.

“Rio Tinto’s Argyle mine is the first and only ongoing source of rare pink diamonds in history,” said Rio Tinto Copper & Diamonds chief executive Arnaud Soirat in 2019. “With the lifecycle of this extraordinary mine approaching its end, we have seen, and continue to see, unstoppable demand for these truly limited-edition diamonds and strong value appreciation.”

Back in April of 2017, The Pink Star, a 59.6-carat, flawless, fancy vivid pink diamond, shattered the world record for the highest price ever paid for any gem at auction. The hammer price of $71.2 million at Sotheby’s Magnificent Jewels and Jadeite sale in Hong Kong easily surpassed the $57.5 million achieved in May of 2016 by the previous record-holder, the 14.62-carat Oppenheimer Blue diamond.

In November of 2018, the 18.96-carat Pink Legacy was purchased for $50.3 million at Christie’s Geneva, establishing a record per-carat price of $2.7 million for a fancy vivid pink diamond. The previous record holder was the 14.93-carat Pink Promise, which sold at auction for $2.2 million per carat in 2017.

FCRF advisory board member Jim Pounds explained why prices for fancy-color diamonds should remain strong: “From the mining perspective, we are currently experiencing a shortage in high-quality fancy-color rough and we therefore feel quite optimistic about the future.”

Source: instoremag