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Weekly Market Report

DIAMOND MARKET OVERVIEW

The overall mood in the diamond market has turned more cautious. Lower attendance by traders at the JCK Las Vegas show, troubled retail chains and political uncertainty have had a knock on effect on confidence about the second half.  Some said the troubles at US retail chains was causing a rethink in the trade. “Many in the trade are having to shift their dependence on the big chains to independent jewellers,” one retailer said. Meanwhile, the main polishedprices index edged lower during the week lower, opening at 116.62 on Friday, from 118.62 at Monday’s opening.

ROUGH MARKET

Traders reported strong demand for rough at De Beers’ sight this past week. The leading supplier is understood to have less to sell after clearing its inventory in the first half.  There were conflicting reports about premiums in the secondary market. Some said premiums on De Beers’ boxes had softened. “Premiums are lower, manufacturers are not making any profit,” said one sightholder in Antwerp. Others said sightholders had anticipated higher premiums, which did not materialize. “I think overall sightholders must have fetched premiums of 3-5% overall and on average,” one trader said. Premiums on Alrosa boxes were reportedly close to negative. There were also reports of a build-up in polished inventory in India as manufacturing levels are exceeding demand in the retail markets. De Beers also struck a more cautious note at the June sight, saying it was "cautiously optimistic" about diamond sales in 2017. 

CORPORATE AND EVENTS

Gem Diamonds Ltd. discovered two diamonds bigger than 100 carats at its Lesotho mine in southern Africa, bringing the struggling miner a step closer to ending a drought of large stones, Bloomberg reported. Gem unearthed a 104.73 carat D color Type IIa diamond and a 151.52 carat Type I yellow diamond at its Letseng mine, the company said in a statement Monday. Type IIa diamonds contain very little or no nitrogen atoms and are the most expensive stones, the Bloomberg report said.

De Beers launched the world's largest diamond exploration vessel off the coast of Namibia as it looks to maintain high production levels until 2035, Reuters reported. The 12,000-tonne, 113-metre-long SS Nujoma was built at a cost of $157 million and is named after Sam Nujoma, Namibia's founding president, the Reuters report said. "I am very, very confident this (vessel) will allow us to continue to extract 1.2 million carats a year," De Beers CEO Bruce Cleaver told Reuters by telephone. He said he was "cautiously optimistic" about diamond sales in 2017 and in terms of value there have been "some small positive movements" but it was too early to declare a trend.

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