November 5th, 2017
DIAMOND MARKET OVERVIEW
Polished traders reported thin trading activity in the wholesale market, due to Diwali and a public holiday in Antwerp on November 1st. Overall, traders continued to report steady demand from retailers in the main US market ahead of the end of year holiday sales. This year, the National Retail Federation (NRF) expects US holiday retail sales to increase between 3.6% and 4%, meeting or exceeding last year’s growth of 3.6% and the five-year average of 3.5%. “We are optimistic that retailers will see a healthy holiday season,” NRF said. Indicators supporting NRF’s positive outlook, included lower unemployment figures, rising home and stock prices and upbeat consumer sentiment. “While US economic data released in mid-October was heavily influenced by the hurricanes that hit Florida, Texas and Puerto Rico, an economic rebound is expected in the coming months, concurrent with the all-important holiday season,” NRF said. In the broader market, the main polishedprices index ended the week virtually flat at, opening at 116.41 on Friday.
Most sightholders are expecting De Beers’ sight this coming week to be more or less in line with the previous sight, which totalled $370 million. Some are expecting a low uptake of goods given the weak rough market conditions and due to India’s Diwali holiday when manufacturers close for a three-week holiday. Despite the bearish mood in the trade, both Lucara and Gem Diamonds said the market for their high-quality diamonds has remained firm during the past quarter.
CORPORATE AND EVENTS
De Beers said it has determined it's not economically viable to extend the life of its Victor diamond mine in northern Ontario and will be shutting down the operation in early 2019, cbc.ca reported. The company had previously said it would like to extend the mine's life, and was looking to process low-grade stockpiles and possibly develop a nearby deposit called Tango, said the cbc.ca report.
Canada’s Lucara Diamond, the company that hit the jackpot in 2015 after finding the world’s second-largest diamond, is ready to begin planning a $195 million underground expansion of its Karowe diamond mine in Botswana as a preliminary economic assessment (PEA) revealed the feasibility of such project, mining.com reported. The PEA foresees total production of 2.72 million carats from 2026, once the current open-pit at Karowe is depleted, said the mining.com report.
Sales from Africa-focused Gem Diamonds’ iconic Letšeng mine increased sharply in the third quarter as improved demand for high-value rough precious rocks boosted prices, mining.com reported. The Lesotho-based mine’s sales jumped by 19% year on year to $48.1 million in the three months to September 30, Gem Diamonds said. While sales volume dropped by 3% to 25,909 carats, average price rose 23% to $1,858, the mining.com said.