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Weekly Market Report

DIAMOND MARKET OVERVIEW

Polished traders reported positive sentiment in the diamond market, as US holiday sales are underway. Both in the US market and mainland China there was good demand, traders said. The National Retail Federation gave an optimistic outlook, saying US holiday sales and consumers’ average spending will rise this season, amid strong sentiment about the economy. “All the retailers we're talking to are giving us great reports, which makes sense given where we are with the economy and the health of the consumer,” NRF said. However, steep discounting to lure customers is hurting margins, highlighted by recent sales declines at Kay, Jared and Zales' diamonds. Signet also warned that profit heading into next year will be ‘light’. In the broader market, the main polishedprices index ended the week higher, opening at 116.00 on Friday, from Monday’s opening at 115.23.

ROUGH MARKET

Rough dealers said sentiment remained cautious, despite healthy sales reported By De Beers at its November sale. According to some, traders were giving credit terms of up to 60 days, highlighting the continued weak market conditions in the secondary market.  In the main cutting centre India, manufacturing is expected to remain subdued following the Diwali holiday, due to the pressure on margins from weak polished prices in relation to rough.

COPORATE AND EVENTS

Africa-focused Gem Diamonds' found a 202-carat rough diamond at its flagship Letseng mine in Lesotho, bringing the number of 100-carat-plus stones the company has found this year to seven, mining.com reported. The recovery of the D-color, type-IIa diamond, said the company, comes after it switched to the higher-grade K6 section of the main pipe earlier this year. In 2016, the company only found five diamonds with a three-figure carat weight, said the mining.com report. This year, however, the number of significant diamonds recovered at Letšeng has picked up significantly, the mining.com report said.

Hong Kong’s Chow Tai Fook Jewellery Group Ltd, the largest jeweller in Chinese territories by market value, on said it aims to open a net 140 to 150 points of sale in mainland China in its current financial year, Reuters reported. Managing Director Kent Wong at an earnings briefing said the jeweller opened 105 points of sale in the mainland in the first half of the financial year started in April, said the Reuters report.

Sales fell at the three mall-based affordable jewellers Kay, Jared and Zales' diamonds. Parent company Signet warned that profit heading into next year will be light, CNN.com reported.Hurricanes and weak sales on engagement and wedding rings led to a "challenging" quarter, CEO Virginia Drosos said, according to the CNN.com report.

South Africa Government may sign a memorandum of understanding (MoU) with diamond industry leaders for setting up of a state-of-the-art diamond polishing factory in the world's largest diamond cutting and polishing hub in the city in December, Times of India reported. A delegation of diamond industry leaders led by Kirti Shah was invited by South Africa Government in Johannesburg last week to discuss possibilities of direct supply of rough diamonds to merchants and unit owners and setting up of a diamond factory in Surat, said the Times of India report.

Planning for what could potentially be the world’s largest custom-built offshore diamond mining vessel has been initiated, diamond giant De Beers announced this week, miningweekly.com reported. The government of Namibia and De Beers’ 50:50 joint venture Debmarine Namibia is aiming to start the operation of a new $142-million, 176-m-long vessel in 2021, said the miningweekly.com report.

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