Abstract According to the annual global sales report released by DeBeers, global demand for diamond jewellery increased by 3% in 2014, reaching a new high of $81 billion. In the top five diamond markets - the United States, China, India...
According to the annual global sales report released by De Beers, global demand for diamond jewellery increased by 3% in 2014, reaching a new high of $81 billion. In the top five diamond markets - the United States, China, India, Japan and the Middle East Gulf region, the demand for diamonds is growing positively in local currency terms. The United States becomes the largest diamond consumer market
At present, the United States has replaced China as the fastest growing market in 2014, up 7% year-on-year to US$37 billion; China is 6%, with a scale of RMB 62 billion; India’s market is recovering positively, up 3% year-on-year, but The impact of the depreciation against the rupee was -1% according to the US dollar; the Japanese market exceeded expectations, an increase of 2%, but was affected by the sharp depreciation of the US dollar against the yen, -11% in US dollars; the Gulf region due to the decrease in the number of tourists, In particular, the consumption of tourists from Russia and China is weak, with only a small increase of 2%. These five major diamond markets account for 75% of global demand.
“Most of the diamonds in Europe are bought by tourists, especially those from China. In Paris, for example, 30%-50% of luxury goods are bought by Chinese tourists. Europe is not the market that De Beers pays attention to. For us, the most important markets are the United States and China, which account for more than 50% of our sales,†said De Beers CEO Philippe Mellier.
Upstream and downstream imbalanced diamond industry chain
According to international market forecasts for the diamond market, by 2018, there will be a shortage of rough diamond supply on the international market.
Due to the price of rough diamonds, the demand for diamond rough market is relatively weak. Data show that in the first half of 2015, global rough diamond sales decreased by 26% year-on-year. South African diamond mining miner Petra Diamonds previously said that as of July 2015, the company's fiscal year revenue fell 10% year-on-year to 425 million US dollars; the world's largest diamond supplier De Beers expects the company's first half profit fell sharply twenty three%. At the same time, De Beers lowered its annual production target again.
In the Indian market, diamond dealers’ profitability declined significantly in the second quarter of this year, and traders began to work with diamond mining companies to come up with the right measures. Indian diamond dealers recently decided to continue their decision in November 2008, “prohibition of importing rough diamondsâ€.
The trader also decided that, on the one hand, the nominee representatives met with the bankers who reviewed the miners' situation and tried to increase bank financing; on the other hand, they promoted some promotional activities and worked with other miners and some industries to increase the demand for diamond jewelry.
“In India, middle-level traders are due to the reduced demand for polished diamonds, and the lack of profitability in the diamond manufacturing industry, resulting in higher and higher bank financing costs, but the miners have not lowered the price of rough diamonds. On the contrary, prices have risen. 0.5%-1%, mining companies are therefore not willing to sell rough diamonds to us,†said Mavji Patel, managing director of Kiran Gems.
Sobrev, the first vice president of Russia's Alrosa Diamonds, the world's largest diamond producer, said: "In the past four years, all large diamond mining companies have increased their mining due to weak market demand and financing difficulties. The combined willingness of rough diamond prices and the price of finished cut diamonds will reduce the willingness of diamond traders to purchase rough diamonds, but by 2018 there will be a shortage of rough diamonds on the market."
China's diamond market will grow steadily
De Beers said that Chinese retailers have more diamond stocks than they expected.
De Beers CEO Philip Merière is full of confidence in the Chinese market. “China’s slowdown in economic growth has led to a decline in demand in the first half of 2015. The demand for diamonds in the second half of the year will be better than the first half. It is expected that after 2016, diamonds in the Chinese market will be Growth is at least 6%."
It is understood that many domestic diamond-operated businesses said that since diamonds have become an indispensable protagonist of the wedding market, the operating conditions in recent months have confirmed the predictions of authoritative organizations.
De Beers CEO Philippe Mellier said that there are two factors that have led to a decline in demand in the Chinese market: one is that China's macroeconomic development is slowing down, and as a result, overall consumption has decreased; the second is important. The factor is the decline in the Hong Kong market in the second half of 2014. It is reported that the market share of Hong Kong accounts for 1%-2% of global market demand.
Liu Xiangdong, an associate researcher at the China International Economic Exchange Center, said that most of the diamonds are denominated in US dollars. As the US economy recovers steadily, the US dollar continues to strengthen and commodity prices will fall. At the same time, the biggest investment value of diamonds is to avoid risks. Under the Fed’s repeated expectations of interest rate hikes during the year, the investment value of dollar assets far exceeds that of precious metals, so the demand for diamonds is falling.
However, China has become the world's second largest consumer of diamonds. Despite the current slowdown in demand for the diamond market, most traders are optimistic about the future of the Chinese market. (Wang Min)
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