RJ Market Watch
Diamond industry preps for a rough, rocky 2020
London: The crisis afflicting the diamond industry won’t end anytime soon, according to Liberum Capital Markets.
There has been little good news this year. An oversupply of rough diamonds, a surfeit of polished stone stocks and falling prices have piled pressure on both the companies that dig them up and the lesser-known businesses that cut, polish and trade them.
“The diamond market has had a torrid year,” Ben Davis, an analyst at Liberum, said in a report on Monday. “While there is some optimism emerging from expected mine supply cuts and an end to the destocking in the midstream that should help lift rough diamond prices, the next six months are still likely to be difficult for the industry.”
The diamond midstream, the industry’s link between African mines and jewelry stores in New York, London, and Hong Kong, is being squeezed like rarely before. With too much supply and banks tightening their financing, many traders are unprofitable. They’ve also been left holding a lot of inventory that’s been falling in value and taking longer to clear than many expected.
The impact on rough diamond pricing has been felt across the industry. Smaller miners, such as Gem Diamonds, Lucara Diamond Corp. and Petra Diamonds, have fallen to the lowest valuations in years, while dominant producer De Beers has been forced to react.
De Beers has been offering more flexibility to its customers, allowing them to reject some rough diamonds, and last month it cut prices across the board by about 5 percent. The company has also been throwing more money at advertising to drive consumer demand.
Still, Liberum’s Davis says more time is needed for a recovery, especially as jewelry demand growth remains subdued and lab-grown diamonds provide an additional competitive threat.
“Destocking of inventory will only end with sustained midstream margin improvement from rising polished prices,” he said. “But end-use jewelry demand remains bleak in key growth markets and synthetic diamond exports from India are exploding.”
Dubai Business Group for Gold and Jewellery Designers conducts its first international design award show
UAE concludes Kimberley Process Plenary in Dubai with tangible action on membership and security
More than 120 leading brands from 16 countries make 31st edition of Jewellery & Watch Show Abu Dhabi a big success
Dubai-based fine jewellery label Amolune celebrates Palestinian culture and Arab identity
Seapearls Jewellery set to celebrate flagship store opening on Ruwi High Street in Muscat
American Gem Trade Association bans exhibition of lab-grown gemstones at its shows
5th Retail Jeweller Dubai Forum 2024 set to decode Next-Gen retail and ways to drive its success
Kanz Jewels wins over customers’ hearts with electrifying event featuring Indian singer Kailash Kher
Joyalukkas launches second showroom in the United Kingdom in London
Phygital, tech adoption and bridging gap with Gen Z turn out to be key areas of focus at the 5th Retail Jeweller Dubai Forum
The Retail Jeweller World Dubai Forum 2021 shines a spotlight on the industry’s brightest achievements
Agile Leadership: What Kept the Boat Floating
A decade of home: Staying ahead in the game
ROI & GMROI : True Measure of Financial Dynamics in Retail
Driving finger-falls to footfalls: Aurum Bazaar
Wide Angle8 months agoAmerican Gem Trade Association bans exhibition of lab-grown gemstones at its shows
RJ Market Watch9 months ago5th Retail Jeweller Dubai Forum 2024 set to decode Next-Gen retail and ways to drive its success
RJ Market Watch7 months agoKanz Jewels wins over customers’ hearts with electrifying event featuring Indian singer Kailash Kher
Daily News11 months agoJoyalukkas launches second showroom in the United Kingdom in London
You must be logged in to post a comment Login