RAPAPORT…
Leading Index Holds Steady
The Conference Board’s index of leading United States economic indicators rose slightly — by 0.1 percent — in January 2007 after the December 2006 increase was revised upward to 0.6 percent as a result of data adjustments in the manufacturers’ new orders and building permits components. The leading index, which currently stands at 138.5 (1996=100), now sits marginally below its most recent high in January 2006 and has been flat to declining in seven of the past 12 months. “The recent behavior of the leading index still suggests that slow to moderate economic growth is likely to continue in the near term,” analysts from The Conference Board concluded.
U.S. Polished Imports Sag
The value of polished diamond imports into the United States declined 7.7 percent to $1.1 billion in December 2006. In terms of volume, the U.S. imported 883,678 carats for the month, the lowest carat total since December 1998. Polished diamond exports from the U.S. were flat in December 2006 at $714 million, while the country’s rough diamond imports and rough diamond exports were both higher, by 34 percent to $55 million and 37.5 percent to $44 million, respectively. Comparisons are with December 2005.
Israel Polished Exports Advance
The value of Israel’s polished diamond exports rose 17.5 percent to $726 million in January 2007, according to the country’s Ministry of Industry, Trade and Labor. In addition, Israel’s polished diamond imports increased 11.7 percent to $284.6 million, while its rough diamond imports dropped 23.7 percent to $268.6 million and rough diamond exports fell 10.1 percent to $248.3 million. For the month, the average prices of Israel’s rough diamond imports and polished diamond exports jumped 36.3 percent to $349.50 per carat and 12.3 percent to $1,752.20 per carat, respectively. Comparisons are with January 2006.
Belgium Exports, Imports Up
The value and quantity of Belgium’s polished diamond exports started off 2007 with January gains of 10.3 percent and 16.2 percent, to $754.2 million and 714,878 carats, respectively, based on data provided by the Antwerp World Diamond Center’s (AWDC) HRD Diamond Office. In addition, the value and volume of Belgium’s polished diamond imports for January 2007 edged up 1.8 percent and 2 percent to $755.1 million and 823,160 carats, respectively. Despite the higher overall totals, the Belgium diamond industry’s polished exports for January were worth an average 5.2 percent less at $1,054.90 per carat. The average price of its polished diamond imports for the same month was virtually steady — down 0.4 percent — to $917.30 per carat. Comparisons are with the same month of 2006.
In a recent statement, the AWDC noted that recent import and export data from the Diamond Office dispels rumors circulating in the diamond industry that traders in Antwerp are transferring diamonds to “safer destinations,” as a reaction to police raids of residences and offices in the city. The raids reportedly are part of a wider investigation into the Monstrey Worldwide Services shipping company, whose offices were closed by law enforcement authorities in October 2005.
India Polished Exports Climb
During January 2007 India exported 16.4 percent and 20 percent more polished diamonds in terms of value and number of carats shipped, respectively. Statistics released by the Gem & Jewellery Export Promotion Council (GJEPC) showed that the respective polished export totals were $1.08 billion and 3.6 million carats. India’s rough diamond imports for the same month climbed 14 percent to $822 million. Comparisons are with January 2006.
Japan Polished Imports Fall
The value of Japan’s polished diamond imports fell 22.9 percent in December 2006 to $61.7 million, figures released by JClub Inc. showed. This was the fifth month in succession that the country’s polished diamond imports have reduced in value. However, in quantity terms, polished diamond imports rose 20.4 percent for the same month to 191,191 carats. For the full 12 months of 2006, the average cost of Japan’s polished diamond imports was down 13.3 percent to $372 per carat. Comparisons are with December 2005 and the full 2005 year.
Brazil Polished Exports Slide
Brazil’s gems and jewelry trade association Instituto Brasileiro de Gemas e Metais Preciosos (IBGM) reported that the country’s polished diamond exports sank 59 percent to $738 million in 2006. Jewelry exports, however, increased 35 percent to $1.3 billion. Comparisons are with 2005.
ALROSA 2006 Sales Hit $3 Billion
Russian state-owned diamond company ALROSA announced that rough and polished diamond sales finished 4.5 percent higher in 2006 at $3 billion. The company is the world’s second-largest producer of diamonds, accounting for about one-quarter of global consumption of rough. Comparisons are with 2005.
Meantime, ALROSA’s 20th international special-sized diamond auction in February netted roughly $23 million in goods sold. The auction was hosted by Russia’s Diamond Chamber office in Moscow and 1,172 diamonds were offered, or more than 21,300 carats in total in 166 lots, including 40 diamonds weighing more than 50 carats each. The largest diamond sold was 133.85 carats.
Rio Tinto Diamond Profits Down
Rio Tinto’s diamond operations generated total sales of $838 million in 2006, representing a 22 percent decrease. This culminated in a 27 percent slump in the diversified resources group’s net earnings from its diamond operations to $205 million. Comparisons are with 2005. Rio Tinto fully owns the Argyle diamond mine in Australia and has a 60-percent share in the Diavik mine in Canada.
While consumer demand for diamond jewelry remained strong, the company pointed out that the diamond supply chain was negatively affected by high levels of indebtedness, rising interest rates and flood-related factory closures in the main cutting centers in India. As a result of softer markets, Argyle held in excess of $100 million of surplus rough diamonds in inventory as of the end of 2006.
BHP Ekati Output Jumps
BHP Billiton’s diamond production for the second quarter of its 2007 fiscal year (FY) climbed 53 percent to 937,000 carats. The mining giant has an 80-percent interest in the Ekati diamond mine in Canada. For the first and second quarters of the FY, BHP’s Ekati output was down 3 percent to 1.4 million carats, the company added. In its report for the second quarter ended December 31, 2006, BHP noted that development of its 80-percent-owned Koala underground diamond mine in Canada was on schedule and budget. Comparisons are with the previous corresponding quarter and half-year.
Endiama Weighing IPO
Angola’s diamond output expanded 31 percent in 2006 to 9.3 million carats. State-owned diamond company Endiama is aiming for annual production of 10 million carats by 2010 and 19 million carats in the following years. To this end, Endiama is considering a listing on either the Toronto or London Stock Exchanges, according to miningmx.com. At the Indaba mining conference held in South Africa last month, the company indicated that the main reason behind the proposed listing was the capital an initial public offering (IPO) would raise. “There is still a lot to discover in my country,” said Sebastiao Panzo, Endiama’s marketing director. “We urgently need to upgrade our geological database and bring as many mines into production as possible.”
The timing of an IPO has not yet been finalized. Of key interest to existing and potential investors in Angola are the coming changes to the way Endiama forms partnerships with companies and the marketing of diamonds through its marketing arm Sodiam. In 2006, the Angolan government set up a committee to evaluate the industry and recommend changes that will help stimulate further investment in the sector.
Date Gold London PM Platinum PM Silver
The Conference Board’s index of leading United States economic indicators rose slightly — by 0.1 percent — in January 2007 after the December 2006 increase was revised upward to 0.6 percent as a result of data adjustments in the manufacturers’ new orders and building permits components. The leading index, which currently stands at 138.5 (1996=100), now sits marginally below its most recent high in January 2006 and has been flat to declining in seven of the past 12 months. “The recent behavior of the leading index still suggests that slow to moderate economic growth is likely to continue in the near term,” analysts from The Conference Board concluded.
U.S. Polished Imports Sag
The value of polished diamond imports into the United States declined 7.7 percent to $1.1 billion in December 2006. In terms of volume, the U.S. imported 883,678 carats for the month, the lowest carat total since December 1998. Polished diamond exports from the U.S. were flat in December 2006 at $714 million, while the country’s rough diamond imports and rough diamond exports were both higher, by 34 percent to $55 million and 37.5 percent to $44 million, respectively. Comparisons are with December 2005.
Israel Polished Exports Advance
The value of Israel’s polished diamond exports rose 17.5 percent to $726 million in January 2007, according to the country’s Ministry of Industry, Trade and Labor. In addition, Israel’s polished diamond imports increased 11.7 percent to $284.6 million, while its rough diamond imports dropped 23.7 percent to $268.6 million and rough diamond exports fell 10.1 percent to $248.3 million. For the month, the average prices of Israel’s rough diamond imports and polished diamond exports jumped 36.3 percent to $349.50 per carat and 12.3 percent to $1,752.20 per carat, respectively. Comparisons are with January 2006.
Belgium Exports, Imports Up
The value and quantity of Belgium’s polished diamond exports started off 2007 with January gains of 10.3 percent and 16.2 percent, to $754.2 million and 714,878 carats, respectively, based on data provided by the Antwerp World Diamond Center’s (AWDC) HRD Diamond Office. In addition, the value and volume of Belgium’s polished diamond imports for January 2007 edged up 1.8 percent and 2 percent to $755.1 million and 823,160 carats, respectively. Despite the higher overall totals, the Belgium diamond industry’s polished exports for January were worth an average 5.2 percent less at $1,054.90 per carat. The average price of its polished diamond imports for the same month was virtually steady — down 0.4 percent — to $917.30 per carat. Comparisons are with the same month of 2006.
In a recent statement, the AWDC noted that recent import and export data from the Diamond Office dispels rumors circulating in the diamond industry that traders in Antwerp are transferring diamonds to “safer destinations,” as a reaction to police raids of residences and offices in the city. The raids reportedly are part of a wider investigation into the Monstrey Worldwide Services shipping company, whose offices were closed by law enforcement authorities in October 2005.
India Polished Exports Climb
During January 2007 India exported 16.4 percent and 20 percent more polished diamonds in terms of value and number of carats shipped, respectively. Statistics released by the Gem & Jewellery Export Promotion Council (GJEPC) showed that the respective polished export totals were $1.08 billion and 3.6 million carats. India’s rough diamond imports for the same month climbed 14 percent to $822 million. Comparisons are with January 2006.
Japan Polished Imports Fall
The value of Japan’s polished diamond imports fell 22.9 percent in December 2006 to $61.7 million, figures released by JClub Inc. showed. This was the fifth month in succession that the country’s polished diamond imports have reduced in value. However, in quantity terms, polished diamond imports rose 20.4 percent for the same month to 191,191 carats. For the full 12 months of 2006, the average cost of Japan’s polished diamond imports was down 13.3 percent to $372 per carat. Comparisons are with December 2005 and the full 2005 year.
Brazil Polished Exports Slide
Brazil’s gems and jewelry trade association Instituto Brasileiro de Gemas e Metais Preciosos (IBGM) reported that the country’s polished diamond exports sank 59 percent to $738 million in 2006. Jewelry exports, however, increased 35 percent to $1.3 billion. Comparisons are with 2005.
ALROSA 2006 Sales Hit $3 Billion
Russian state-owned diamond company ALROSA announced that rough and polished diamond sales finished 4.5 percent higher in 2006 at $3 billion. The company is the world’s second-largest producer of diamonds, accounting for about one-quarter of global consumption of rough. Comparisons are with 2005.
Meantime, ALROSA’s 20th international special-sized diamond auction in February netted roughly $23 million in goods sold. The auction was hosted by Russia’s Diamond Chamber office in Moscow and 1,172 diamonds were offered, or more than 21,300 carats in total in 166 lots, including 40 diamonds weighing more than 50 carats each. The largest diamond sold was 133.85 carats.
Rio Tinto Diamond Profits Down
Rio Tinto’s diamond operations generated total sales of $838 million in 2006, representing a 22 percent decrease. This culminated in a 27 percent slump in the diversified resources group’s net earnings from its diamond operations to $205 million. Comparisons are with 2005. Rio Tinto fully owns the Argyle diamond mine in Australia and has a 60-percent share in the Diavik mine in Canada.
While consumer demand for diamond jewelry remained strong, the company pointed out that the diamond supply chain was negatively affected by high levels of indebtedness, rising interest rates and flood-related factory closures in the main cutting centers in India. As a result of softer markets, Argyle held in excess of $100 million of surplus rough diamonds in inventory as of the end of 2006.
BHP Ekati Output Jumps
BHP Billiton’s diamond production for the second quarter of its 2007 fiscal year (FY) climbed 53 percent to 937,000 carats. The mining giant has an 80-percent interest in the Ekati diamond mine in Canada. For the first and second quarters of the FY, BHP’s Ekati output was down 3 percent to 1.4 million carats, the company added. In its report for the second quarter ended December 31, 2006, BHP noted that development of its 80-percent-owned Koala underground diamond mine in Canada was on schedule and budget. Comparisons are with the previous corresponding quarter and half-year.
Endiama Weighing IPO
Angola’s diamond output expanded 31 percent in 2006 to 9.3 million carats. State-owned diamond company Endiama is aiming for annual production of 10 million carats by 2010 and 19 million carats in the following years. To this end, Endiama is considering a listing on either the Toronto or London Stock Exchanges, according to miningmx.com. At the Indaba mining conference held in South Africa last month, the company indicated that the main reason behind the proposed listing was the capital an initial public offering (IPO) would raise. “There is still a lot to discover in my country,” said Sebastiao Panzo, Endiama’s marketing director. “We urgently need to upgrade our geological database and bring as many mines into production as possible.”
The timing of an IPO has not yet been finalized. Of key interest to existing and potential investors in Angola are the coming changes to the way Endiama forms partnerships with companies and the marketing of diamonds through its marketing arm Sodiam. In 2006, the Angolan government set up a committee to evaluate the industry and recommend changes that will help stimulate further investment in the sector.
Date Gold London PM Platinum PM Silver
| 1/26/07 | 645.50 | 1169.00 | 13.220 |
| 1/29/07 | 644.75 | 1164.00 | 13.250 |
| 1/30/07 | 645.20 | 1170.00 | 13.150 |
| 1/31/07 | 650.50 | 1169.00 | 13.360 |
| 2/1/07 | 660.20 | 1191.00 | 13.580 |
| 2/2/07 | 645.70 | 1165.00 | 13.660 |
| 2/5/07 | 649.40 | 1165.00 | 13.290 |
| 2/6/07 | 653.25 | 1186.00 | 13.660 |
| 2/7/07 | 653.75 | 1195.00 | 13.650 |
| 2/8/07 | 656.00 | 1187.00 | 13.530 |
| 2/9/07 | 664.50 | 1196.00 | 13.840 |
| 2/12/07 | 664.55 | 1189.00 | 13.780 |
| 2/13/07 | 667.80 | 1194.00 | 13.790 |
| 2/14/07 | 668.25 | 1216.00 | 13.960 |
| 2/15/07 | 664.75 | 1213.00 | 13.980 |
| 2/16/07 | 665.10 | 1195.00 | 13.900 |
| 2/19/07 | 670.75 | 1217.00 | 14.030 |
| 2/20/07 | 663.90 | 1208.00 | 13.900 |
| 2/21/07 | 661.25 | 1210.00 | 13.740 |
| 2/22/07 | 676.60 | 1225.00 | 14.250 |
