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Diamond prices soft in June

Diamond prices continued to soften in June with many categories trading at deep discounts to the Rapaport Price List. Markets were relatively quiet as US demand after the JCK Las Vegas show was weaker than in previous years. Diamond manufacturers are under pressure and continue to lose money on their rough supply.

The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds fell 0.9 percent during June. RAPI for 0.30-carat diamonds declined 2.5 percent and RAPI for 0.50-carat diamonds dropped 2.6 percent. RAPI for 3-carat diamonds decreased 1.7 per cent. RAPI for 1-carat diamonds fell 1.6 percent during the second quarter of 2015 and on July 1, 2015 was down 15.3 percent from a year earlier.

Hong Kong Show reflects cautious Far East market

According to the Rapaport Monthly Report – July 2015, the June Hong Kong show sales reflected a cautious Far East market and weak dealer sentiment. Manufacturers’ profit margins are being squeezed between stable rough diamond prices and declining polished diamond prices. There is a shortage of fine-quality diamonds and selective buyers are paying firm prices for these goods to fill existing orders. However, there is a lot of excess inventory of lower-quality diamonds and flexible inventory buyers are getting good deals.

Rough producers prefer to reduce supply rather than prices in the current weak market. Rough prices remained relatively stable in the second quarter after slipping an average 5 percent to 7 percent in the first three months of the year. De Beers rough sales fell by approximately 28 percent year on year to $2.5 billion in the first half of 2015, according to Rapaport estimates.

Gems One launches Epic 101 Diamond Cut

GemsOne launched the Epic 101, a new branded special-cut diamond that features 101 facets and employs what the company identified as a faceting architecture designed to provide maximum light performance. The company is marketing the Epic 101 to authorised dealers to gain a competitive advantage in the bridal category.

Anuj Jain, president of Gems One, said, “We see a special opportunity with the Epic 101 for our customers to expand their market share, as well as increase margins in the loose diamond category in their stores. The specialty cut category is clearly expanding in the independent space and we expect to be able to create an optimized dealer network with this brand fairly quickly.”

Gems One intends to limit the dealer network offering Epic 101 to 70 in the initial phase. George Prout, the vice president of sales and marketing at Gem One, said, “We’re taking appropriate steps to ensure an excellent experience for our dealers. We are even allowing new dealers to submit some of their own diamonds for re-cutting into Epic 101s, to make it cost-effective to have a nice assortment of loose Epics on hand from the moment they start as an authorised Epic 101 dealer.”

Polished Diamond Prices Rise

After languishing for most of the month, global polished diamond prices perked up notably in the final days of June. The rise in diamond prices is most likely related to the “jewelry show” effect. As traders gather and hold goods for the particular show, fewer items are available in the trading centers, causing prices to go up.

The IDEX Index of Global Polished Diamond Prices averaged 130.1 during June, up from May’s average of 128.7. The good news: prices remain well ahead of the year’s low of 123.7 in February.

Polished diamond prices reached a daily IDEX index high of 132.9 on the last day of June, and held near that level for the first few days of July. Polished diamond prices were flattish most of the month, then showed a spike on June 27. Since then, prices have been flat at the new higher level.

GIA’s Leadership programme

For the second year in a row, senior gem and jewelry executives gathered at Harvard Business School (HBS) in Cambridge to discuss challenges facing the industry during the Gemological Institute of America (GIA) Global Leadership Program. From June 15 to 18, 42 senior executives from 12 countries and 14 sectors – ranging from mining to manufacturing and retail – participated in a custom program with a curriculum based on the distinguished HBS case study method. The 2015 program focused on the importance of marketing, branding, strategy and communication to a company.

“The quality of the case studies, the participants, the interactions and debate, as well as the ability of the HBS professors to deliver was at the pinnacle of exceptional quality,” said John Green, the chair of GIA’s board of governors. “This program has again brought closer collaborations to our supply chain and our industry.”

Among the case studies covered during this year’s program were Harley Davidson’s entrance into the India market, the iconic "Intel Inside" campaign and the building of the Real Madrid soccer team into a global brand.

GIA, in conjunction with HBS, initiated the four-day program in 2014 to bring together global leaders representing different sectors of the gem and jewelry to examine issues faced by international businesses and apply the experiences of other sectors and industries to their own. The program also provides an unparalleled networking opportunity for senior executives, building bridges between different sectors of the global gem and jewelry supply chain.

Indian participants at the Program included Mihir Bhansali of Firestar Diamond Inc; Rohit Dhamani of Dhamani Group; Akshay Dholakia of Shree Ramkrishna Exports Pvt. Ltd.; Hasumu Dholakiya of H.K. Designs/Hari Krishna Exports; Sandeep Kothari of KGK Diamonds; Akarsh Mehta of Excel Success Ltd.; Arnav Mehta of Blue Star Group; Ashay Mehta of Rasiklal Hiralal & Co.; Raj Mehta of Rosy Blue NV; Viral D. Mehta of Dimexon; Kapil Nevatia of Sunjewels Pvt. Ltd.

Bombay Diamond Jewellery Launches Millennial Campaign

According to Rapaport, Bombay Diamond Jewellery Company launched its Diamonds Dream In Color campaign at the JCK Las Vegas in May. The campaign, geared to the millennial customer, is centered on the rarity and beauty of natural pink diamonds. Bombay said that it possesses 40 percent of the natural pink diamonds on the market today. Since the launch of its Naturally Pink diamond product as a new category at JCK Las Vegas in 2012, the company has maintained a steady and consistent distribution network of pink diamonds to its customers.

The new campaign, created by StarLuxe Luxury Branding founder Debra Puzio, is meant to capture the imagination of the millennial looking for something beyond typical diamond jewelry.“Diamonds have been at the very center of millions of dreams for centuries," Puzo explained. "To consistently bring natural pink diamond jewelry to the consumer market is a luxury that will pique the curiosity of individuals seeking something with greater value than commodity-priced natural white diamonds.

“Pink diamonds of any size are rare by any measure,” said Nihar Mehta, principal of Bombay Diamond Jewelry. “We are using our position in the market to bring pink diamonds to the U.S. consumer and provide educational materials that will enhance the story behind these rare and beautiful diamonds.”The styling uses pink diamonds ranging in size from 0.003 carat to 0.06 carat and range in color from light fancy pinks to intense pinks in brownish and purplish tones. Jewelry styling has been developed at key price points for all retailers.

Excelsior Prepares to Fill Lending Gap in Diamond, Jewelry Industry

Excelsior Capital Ventures (ECV) LLC, founded by Nehal Modi is in the process of a significant capital increase targeted solely for deployment in the diamond and jewelry manufacturing/wholesaling sectors. ECV will provide loans securitized by diamond and precious metal inventories. The Excelsior platform allows for a host of lending solutions that are tailor made to the borrower’s requirements.

In an environment where the diamond and jewelry industry is seeing a significant decline in lending and access to capital, Excelsior is entering the market at an ideal time. ECV’s business model is built around an ecosystem that encompasses secure asset management, risk-mitigated logistics, spot market appraisals, asset monetization and assisted marketing solutions for customers’ inventory.According to ECV's chairman, David Barr, “We are extremely excited about being a part of the solution to allow diamond and jewelry wholesalers to once again fund their growth.”ECV's CEO, Modi, said, “The industry is at a critical juncture, where all stakeholders have to adapt to the ever-changing landscape. In that regard, companies must reevaluate their capital structures, systems and willingness to demonstrate transparency to lenders. Excelsior can greatly assist clients with all three of these goals.”

Top industry manufacturers are in support of Excelsior’s asset-based lending model. “It’s a game changer for sure. The industry needs the liquidity, but more importantly, the innovative integrated lending solution that Excelsior brings to the table,” said Greg Sofiev, the CEO of LLD Diamonds USA, a Leviev group company.

Excelsior has engaged investment banking firm Consensus (www.consensusadvisors.com) to advise on the capital increase and structure of any future transactions. Michael O’Hara, the CEO of Consensus, commented that the jewelry industry is experiencing a shortfall of liquidity and a model such as Excelsior will be well received by the industry.

Dubai World Trade Centre to host 28 new trade events

Dubai World Trade Centre will host more than 28 new commercial events in 2015. The events include international conferences and global meetings, as well as commercial exhibitions in various economic sectors like health care, arts, jewellery, engineering, air traffic control and information technology. The number is liable to increase, particularly because some economic events are pending until the signing of some agreements. DWTC, is optimistic that 2015 will be the strongest year for the centre in terms of events.

Dubai’s industry groups also reckons that the branding associating Dubai as the `City of Gold' should be reinvigorated, particularly in exposures outside of the UAE. The Government and all the stakeholders in the industry have worked so hard to create the `City of Gold' branding. This is as good a time as any to strengthen the message.

Russian buyers are yet to make a return despite the rouble having recently erased some of the steep drops it had suffered against the dollar, and which had erased the high spending Russian tourists from Dubai's retail market since late last year.

There have been other worrying signs — The expected volume of business from Indian tourists visiting the UAE during April-May did not materialize. Tourist transactions in recent years had averaged well over Dh10,000, but in recent months has dropped appreciably.In broad terms, 80 per cent of transactions are now done by domestic shoppers as against the 60:40 split that was there earlier.

Belgian crafting technology helps Asian jewellers shine

Belgium's leading diamond manufacturing technology has helped Asian jewellers shine. The world-exclusive 100-facet TSL Estrella diamond features nine symmetrical hearts and a solitary blossom visible on the crown.The innovative series adopts the unique and world-leading 100-facet cutting technology, which demands that each diamond is cut numerous times. The process is much more complicated than the regular 58-facet cutting method.

The flagship series of Tse Sui Luen, Estrella, is the result of three years worth of joint efforts from the company and Rosy Blue in Antwerp, which is one of the world's leading suppliers of rough and polished diamonds to the world's wholesale and retail jewelry industry.TSL said the result of this symmetry is a brilliant "fiery" luminescence with peerless scintillating beauty, reflecting the fact that Estrella means "shining star" in Spanish.The hearts symbolize an everlasting relationship. While the blossoming flower represents the birth of a star - the star of your life and your true love.With the unique "Nine Hearts and One Blossom" patterned stone as its highlight, the Estrella series makes a breakthrough in sparkle levels compared with conventional diamonds.Every Estrella diamond is accredited by two of the most-respected independent institutions in the world, the International Gemological Institute and GemEx.

Dark rhodium and ruthenium now being used for a distinct design touch

The deep gunmetal finish of black rhodium plate and the pure black of ruthenium are both becoming increasingly popular, jewellers say.Ice-white platinum has long had enduring appeal in jewelry and experimental designers are now also turning to its lesser-known sister metals rhodium and ruthenium to produce work in darker hues.Platinum's sister metals are produced mainly for industrial uses: rhodium as a component in automobile catalytic converters and ruthenium for electronics. But demand for jewelry, even when tiny overall, can add to the lustre of a precious metal, especially as the exotic metals become more affordable. Both rhodium and ruthenium are much less expensive than they used to be, with rhodium currently just cheaper than platinum at US$1,125 an ounce versus more than US$10,000 an ounce back in 2008, and ruthenium at US$48 an ounce, compared to US$880 at its 2007 peak.They have appeared in pieces sold by established brands like Tiffany and Links of London. For smaller designers they offer a chance to make one-offs and pieces that stand out. They can be used in bespoke pieces, when customers wanted a particular finish. It looks lovely — a glossy, polished black.Rhodium is normally white, and commonly used for years as plate to give a lustrous finish to white gold. Black rhodium is made by adding an ink dye that binds to the metal.Its extreme hardness and high melting point make it a difficult metal for jewellers to work, so pure rhodium jewellery is highly unusual.

Global diamond trade in dire straits

The global diamond trade is in trouble. While the US$80 billion overall spent on diamond jewelry last year was a record, the manufacturers are expected to share a profit of just US$100 million in 2015. That is half last year's total and down from US$900 million in 2010, according to the industry's top consultants.

Manufacturers who cut and polish diamonds have found themselves caught between giant mining companies charging high prices for rough stones, and big retail chains that demand gems at low margins to keep sales moving.300,000 Chinese and Indian workers had been laid off out of nearly 1 million employed in gemcutting in those two countries, where most manufacturing takes place.

The leading mining companies formed a Diamond Producers Association with a focus on stimulating consumer demand. But its annual budget is just US$6 million, which many delegates at the conference said was not enough.No major deposits have been discovered in about two decades. The miners say they are investing heavily to keep supplies coming.Production in 2013 was down 26 percent since 2005, although estimates suggest it has risen slightly since.De Beers, a unit of South Africa's Anglo-American which is the market leading diamond miner in terms of value, says current projects are costing it more than US$3 billion.Russia's Alrosa , the world's top producer by volume, just finished building three underground mines at US$1 billion each.De Beers acknowledged that high costs for rough diamonds were forcing changes on gemcutters.

Miners had taken an unsustainable short-term approach by charging high prices.When polishers and traders can no longer afford to buy rough diamonds, De Beers and Alrosa will suffer. De Beers has already reduced its output forecast for 2015 because of weaker demand. Alrosa's prices have fallen 6 percent this year.

Manufacturers' margins are also being squeezed by retailers, including big chains that have been consolidating to cut costs. Although overall retail jewelry sales were buoyant, jewelers were now putting fewer and smaller diamonds in their pieces.

The low profits make it harder for manufacturers to pay for the financing they need to buy rough diamonds and hold them until they can be sold. This estimated debt totaled US$15.4 billion at the end of last year.

Rare 950-ct natural Burmese ruby at Singapore International Jewelry Expo

A rare 950-carat natural Burmese ruby rough was now on display at the Singapore International Jewelry Expo (SIJE), which opened July 2. The Expo also had the Million Dollar Row, a showcase of rare jewellery pieces worth up to S$3.3 million. SIJE, which integrates jewelry and investment, kicked off with the largest collection of diamonds and natural gemstones in Singapore. This year's event focuses on the latest trends on jewelry crafted in the beauty of gold, white, yellow, rose, purple and black, and encrusted in the widest range of precious stones of all hues. These diamonds are crafted by talented jewelers from Italy, China's Hong Kong SAR, India, Malaysia, and Singapore etc. Bringing together local and international jewelers, manufacturers and suppliers, SIJE attracts more than 200 exhibitors from 26 countries and regions with more than USD 150 million exhibits spanning a gross area of 8,000 square meters. SIJE showcases a wide range of gems and accessories to both members of the trade and the public with the complement of jewelry fashion show. One of the highlights of this year's SIJE is the 950 carat natural unheated Burmese ruby rough. It's reported that the sale of a 25.59 carat Burmese ruby ring set a world record price of USD 30. 33 million at Sotheby's auction in Geneva in May this year, which may help visitors to appreciate the value of the "huge " rough ruby. Visitors also have the opportunities to appreciate the beauty of a 9.47 carat fancy yellow diamond, a 38 carat unheated Burmese Sapphire, a diamond necklace made up of a string of white diamonds at the four-day event. Besides looking out for fancy jewelry, visitors can also communicate with experts on gemstones, jewelry, fashion and trends in series of talks during the SIJE.

Thai Jewelry & Gem exporters to visit many countries looking for new deals

Thai Ministry of Commerce will lead a group of gem and jewelry exporters to France, South Korea, China and Bahrain for business promotion, hoping to increase the 2015 export revenue by 5 per cent.

Mrs.Nuntawan Sakuntanaga, Director-General of the International Trade Promotion Department says the roadshow is part of the ministry's strategic plan to open new markets in the four countries. The U.S. is the next target in the plan as its economy is predicted to grow 3.6% in 2015 - giving its people more purchasing power.

Jewelry & Gems, excluding gold, rank fourth as Thailand's export earner. Their sales are likely to grow year on year. During January to April, the revenue rose by 3.9 per cent, to US$2,415m.

Thai exporters to never stop studying new sale channels. She said e-commerce is an interesting choice as it has helped some US-based companies in surging their sale by 120 per cent in the past 2-3 years. However, the Director-General said European customers, in particular Germans, still prefer TV advertisements. Therefore, Thai exporters need to choose the right channel for different groups of consumers.