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Weekly Market Report


DIAMOND MARKET OVERVIEW
Polished traders reported steady demand in the dealer market during the past week. Traders will be closely watching the Hong Kong Jewellery trade show this coming week (February 28 - March 4) for evidence of a recovery in demand in mainland China, as reported by a number of leading jewellery retailers. In the broader market, the main polishedprices index ended the week on a softer note, opening at 118.41 on Friday, from 119.03 at Monday’s opening.

ROUGH MARKET
There was strong demand for rough at De Beers’ February sight this past week. Sightholders reported shortages in certain areas of rough, in particular higher quality smalls.  Manufacturing levels have been ramped up in the cutting centres since the start of the year, raising some caution about a build up in polished inventories.

CORPORATE AND EVENTS
Higher revenues contributed to a 42% improvement year-on-year in diamond miner De Beers’ underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) to $1.4 billion in 2016, miningweekly.com reported. A 30% increase in revenue to $6.1 billion was driven by stronger rough diamond demand, which led to reduced inventory levels, thereby reflecting improved trading conditions compared with those experienced in the second half of 2015, said the miningweekly.com report.

Anglo American Plc reported profit more than doubled last year amid a recovery in commodities, leading the mining giant to say it no longer needs to sell assets to reduce debt, Bloomberg reported. The results, which exceeded analysts’ estimates, show Anglo’s reversal of fortune from last year when investors were questioning whether the company could survive tumbling metals prices, said the Bloomberg report. Anglo aims to return to an investment-grade credit rating this year and pay a dividend in 2018, the Bloomberg report said.

Petra Diamonds’ production increased by 24% year-on-year to two million carats for the six months ended December 31, miningweekly.com reported. Revenue rose 48% to $228.5 million, while earnings before interest, taxes, depreciation and amortisation were up 80% to $87.1 millio, said the miningweekly.com report. "Petra has achieved strong operational and financial results owing to the increased contribution of undiluted ore and continued stabilisation in market conditions,” CEO Johan Dippenaar said in a statement, according to miningweekly.com.

 

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