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Las Vegas… Diamond market conditions improved in December as US and Chinese holiday demand helped raise sentiment. Polished prices stabilized and improved for sizes under 1 carat, supported by shortages of G+, VS2+ goods. High-end qualities (F+, VVS+) of 3 carats and larger diamonds remain weak.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds slid 0.2% in December and 5.3% for the full year. The index for 0.30- and 0.50-carat stones firmed in the fourth quarter following steep declines earlier in the year. 

RapNet Diamond Index (RAPI™)
	December	4Q 2019	FY 2019
RAPI 0.30 ct.	1.7%	8.7%	-7.5%
RAPI 0.50 ct.	1.2%	3.4%	-4.9%
RAPI 1 ct.	-0.2%	-0.7%	-5.3%
RAPI 3 ct.	-0.5%	-0.7%	-16.5%

The market in 2019 was supply-driven, as noted in the Diamond Price Statistics Annual Report that appears in this month’s issue of Rapaport Magazine.

An oversupply of diamonds set a negative tone, leaving the trade with numerous diamonds that were difficult to sell. Inventory levels declined in the fourth quarter, but there were a lot of lower-quality goods still available at the end of December.

The year also saw a change in consumer patterns. Multi-channel jewelry shopping and online diamond trading gained momentum. That gave buyers access to larger inventories and more information about the goods, enabling them to cherry-pick the best-quality stones and leaving the trade with large quantities of less desirable merchandise.

The industry in 2019 also endured tight manufacturing profits, a reduction in bank credit, and cautious Far East demand resulting from uncertainty about the US-China trade war and Hong Kong protests.

There is some optimism for the new decade. The industry can expect lower rough supply, market consolidation, further changes to the way diamonds are bought and financed, greater use of technology, an emphasis on ethical sourcing, and segmentation of lab-grown and natural diamonds into distinct markets, as the December 2019 Rapaport Research Report predicts.

To navigate these trends and bring about an upswing in diamond prices, the industry must invest in marketing and develop more efficient processes and inventory management. Diamond jewelry sales must outperform the last decade’s and should exceed $100 billion by 2030.

Source: Diamond.net

Before the 2010s decade came to an end, Laurence Graff, the founder of the luxury jewelry and gem brand that bears his name, had one more deal to make with the acquisition of a 20.69-carat fancy yellow diamond named the “Firebird.”

The Asscher-cut diamond with VS1 clarity and “excellent polish and symmetry,” according to the report from the Gemological Institute of America, was purchased from Russian mining giant, Alrosa, the world’s largest diamond miner by volume.

“We are delighted to see that such a beautiful exceptional diamond has found an equally exceptional owner,” Sergey Ivanov, Alrosa CEO, said in a statement making the announcement December 24. “It is more than just a regular deal for Alrosa. This is the first direct purchase of Graff made without intermediaries, and we hope that it will be the beginning of a new phase of our work.”

The diamond was cut and polished at Alrosa’s recently opened manufacturing facility. The company says the yellow gem resembles “a simultaneous ensemble of flame, reflections of sunlight on crystal water and a trail of sparkles coming from the tail of a Firebird.”

Alrosa says the diamond is a part of “The Spectacle,” a diamond collection dedicated to the Russian ballet. There are two more diamonds in the collection, one of them is “Spirit of the Rose,” a 14.8 ct fancy vivid purple-pink stone unveiled in August. Another diamond will be announced later this year when cutting and polishing is finished.

The diamond is named after the legendary ballet “Firebird,” which premiered in 1910 at the Grand Opera in Paris. The ballet was the first of Sergei Diaghilev’s Ballets Russes productions to have an all-original score. It had the idea of creating a “national ballet” driven by the popularity of Russian folk songs and dances among the French public. The plot is based on the Russian fairytale of the Firebird and the blessing and curse it possesses for its owner. The music was composed by the Igor Stravinsky, the famed Russian composer.

The Firebird diamond was created from a 34.17 ct rough diamond named “Stravinsky,” that bears both rare honey-yellow overtones and exceptional clarity, according to Alrosa. Discovered at the “Ebelyah” mine in Yakutia, the gem became the largest yellow rough diamond extracted in Russia in 2017. It was defined by its naturally-occurring shape, smooth structure and, most certainly, by its incredible intensity and homogeneity of color.

For Graff, based in London, the purchase caps another year of notable acquisitions and unveilings, led by the April reveal of the “Graff Lesedi La Rona,” a 302.37-carat D-color, high-clarity stone that the brand says is the “world’s largest square emerald cut diamond” and the “largest highest clarity, highest color diamond ever graded by the Gemological Institute of America (GIA).” It is the main diamond cut and polished from the 1,109-carat Lesedi La Rona rough, which was purchased in 2017 by Laurence Graff. In addition to the main diamond, 66 “satellite” diamonds have been polished from the rough, ranging in size from under a carat to more than 26 carats.

Source: Forbes

The Western Australian government has invited Gibb River Diamonds and India Bore Diamond Holdings to mine at the Ellendale deposit.

The companies will pay rental fees on the areas in which they set up operations, rather than owning that portion of the site outright, the Department of Mines, Industry Regulation and Safety (DMIRS), told Rapaport News last week.

Although DMIRS has already conducted a recent geological exploration of the area to confirm there are still diamond prospects, both companies will need to explore the area further, speak with key stakeholders in the region, and develop mining plans for approval by the state government.

“It’s not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley [region of Western Australia],” Mines and Petroleum Minister Bill Johnston noted.

Gibb and Indian Bore will take on Ellendale’s E4 and E9 pits, and will also have access to storage facilities and infrastructure that belonged to previous Ellendale owner Kimberley Diamond Company before it went into administration in 2015. Since then, the government has been managing the property through its abandoned-mines program. Last year, it announced it was seeking expressions of interest in the site.

Ellendale produced around half of the world’s supply of rare yellow diamonds during peak production, and was also the main supplier of fancy-yellow diamonds for luxury-jewelry retailer Tiffany & Co.

Gibb recently purchased the Blina diamond project, which is adjacent to Ellendale. It is waiting on a final investment of AUD 2.5 million ($1.7 million) to begin mining the area. India Bore is a private company, established in 2015 by CEO Peter McNally, a mining executive with over 35 years of experience.

Source: Diamonds.net

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Source: CDI

A drop in rough-diamond prices and a sales shift to lower-value items weighed on De Beers’ profitability in the second half, according to executives at parent company Anglo American.

The miner’s rough-price index fell around 5% year on year for the first nine sights of 2019 amid a market slowdown, Anglo CEO Mark Cutifani noted in a call with investors last week. Combined with the weaker product mix, the average selling price slipped approximately 20%.

“It’s been a tough half…for diamonds,” said finance director Stephen Pearce. “In addition to the general price decrease and general market conditions and softness that we’re seeing, we have also sold a lower mix of diamonds, and with that comes lower EBITDA [earnings before interest, taxes, depreciation and amortization] margins.” These margins will be “substantially lower” than the 20% it reported for the first six months, Pearce added.

De Beers’ rough sales declined 26% to $3.6 billion for the January-to-November period, as an oversupply of rough and polished in the midstream hurt demand. Rising diamond stockpiles contributed the majority of Anglo’s $500 million inventory buildup this year, the company said.

However, buyers’ focus on purchasing cheaper items means De Beers now holds relatively high-quality rough inventory that it can sell next year at better margins, the executive explained. “What we’ve actually got then sitting in stock is a pretty good mix that we’ll exit the year-end on, which should have some pretty good EBITDA margins,” Pearce continued.

The drop in the price index reflects discounts of 4% to 8% De Beers offered for lower-quality rough at its June sight, plus a price reduction of about 5% on a wider range of goods in November. That latest move improved profitability for sightholders, resulting in steady demand at last week’s December sight, the 10th and final sales cycle of the year, a rough broker told Rapaport News on condition of anonymity. The miner left prices unchanged for the sale, which ended Friday, the broker added.

For December, De Beers also reverted to its standard limitations on sightholders rejecting goods, ending several months of unprecedented concessions designed to ease the midstream diamond glut.

“We’ve certainly seen a little bit of improvement later in the year,” Cutifani said. “The first couple of sights in the new year will be…a better point [to assess] how that market is going. We’ve seen some encouragement, but I think it’s still a little too early to bank that in any more of a substantive sense.”

De Beers is scheduled to announce the value of the December sales cycle this Wednesday, and will release its annual financial results on February 20.

Source: Diamonds.net