Beware a Supply Bottleneck RAPAPORT. The positive sentiment the diamond market experienced during the past few months was a welcome change from the gloomy tone that characterized 2020. Buoyed by holiday sales that proved better than expected, the trade gained the confidence to buy again, even with activity limited mostly to online platforms.
For the first time in many years, polished suppliers struggled to fill orders due to shortages during the fourth quarter. Just a year earlier, the midstream was plagued by what seemed to be a chronic oversupply that pushed down polished prices and caused profit margins to tighten. Among the few benefits of the Covid-19 lockdowns was that manufacturers were forced to freeze rough purchases, stop production, and start depleting the excess inventory they had.
RAPAPORT. Dominion Diamond Mines has completed the sale of its Ekati mine in Canada, and has resumed operations at the site.
Arctic Canadian Diamond Company, a business owned by two of Dominion’s bondholders, has acquired all of Dominion’s assets, except its 40% stake in the Divaik mine, which it shares with joint-venture partner Rio Tinto, Dominion said Wednesday.
Under the terms of the agreement, Arctic will assume $70 million of Dominion’s debt and will cover a number of its liabilities. It will also provide the miner with $85 million in working capital.
“This transaction significantly reduces our debt obligations, and provides sufficient liquidity to fund our operations, invest in future growth and allow the company to emerge with a materially stronger balance sheet,” said Dominion chief financial officer Kristal Kaye.
Polished market segmented. Goods below 1 ct. softening, with slowdown in D, IF category after strong 2020 recovery. 1.50 ct. and larger firm. 1 ct. RAPI -0.6% in Jan., 3 ct. +1.7%. Polished inventory expected to rise in coming months after strong Dec.-Jan. rough buying. De Beers Jan. sales +18% to $650M. Letšeng 4Q sales +6% to $55M, average price +11% to $1,907/ct. Hong Kong dealer market slowing ahead of Feb. 12 Chinese New Year. Mainland China retail robust and anticipating strong growth versus pandemic-affected 2020 season. India exempts online rough auctions from 2% e-commerce tax, maintains 7.5% duty on polished imports. India 2020 polished exports -31% to $14.2B.
Fancies: Stable demand for select fancy shapes as consumers seek alternative designs at more affordable prices than rounds. Dealers hoping for increased sales of fancy-shape engagement rings. Rise in orders for Pears, Emeralds and Radiants above 2 ct.
RAPAPORT. The All India Gem and Jewellery Domestic Council (GJC) has named Ashish Pethe as its new chairman as part of a shake-up of its leadership team.
The council, which represents India’s domestic jewelry industry, elected nine new board members, who in turn picked Pethe as chairman, he told
Rapaport News this week. His term began on January 1 and will last two years. He succeeds Anantha Padmanaban, who had been in charge since 2019.
Saiyam Mehra will take over as vice chairman, a spokesperson added.
Image: Ashish Pethe. (GJC)