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Weekly Market Report

DIAMOND MARKET OVERVIEW

Overall volumes were thin over the past week, following the Christmas break. Most traders are optimistic about the start of the year, following a decline in prices during 2017. According to a research note by Canaccord, rough diamond prices closed 2017 down 5% - 10%, with polishedprices.com reflecting a similar decline. The overhang in polished inventory declined in the second half, resulting in a healthier supply demand balance going into 2018. Polished prices have strengthened over the holiday period by around 1-2%, partly driven by healthy sales in the main US market. Mainland China also saw good demand from retailers.  In the broader market, the main polishedprices index ended the week higher, opening at 116.87 on Friday, from Monday’s opening at 115.97.

ROUGH MARKET

Traders were upbeat about rough demand at the start of the year. Rough prices could be 5% - 10% stronger in the first half, Des Kilalea analyst at Canaccord said in a research note to clients published this past week. Although it is less certain this will be sustained in second half as margin pressure in cutting centres is likely as rough prices increase, the research note said. All eyes are on the De Beers sight Jan 22-25, when trading activity is expected to return to normal levels.

CORPORATE AND EVENTS

India's diamond manufacturers are looking at setting up cutting and polishing units in Russia for easy access of rough diamonds from Alrosa mines as the central government has yet to come up with a tax structure to enable the country's diamond trade to directly purchase rough diamonds from the special notified zone (SNZ) at Mumbai's Bharat Diamond Bourse, Economic Times reported.  KGK Diamonds has announced setting up of cutting and polishing unit in Vladivostok in Russia and two more leading diamond com, the Economic Times report said. 

The European Union has taken over the chairmanship of the Kimberley Process for 2018, a decade after it last directed the initiative. Federica Mogherini, who is an Italian politician and the High Representative of the bloc for Foreign Affairs and Security Policy, will be heading the operation, mining.com reported. 

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