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The Problem With Diamonds Is They Keep Getting Cheaper

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Americans are buying more diamond jewelry than ever before, but prices for most polished gems are falling.

Five years ago, the diamond industry’s biggest worry was being forgotten by millennials, who — the theory went — didn’t covet sparkly gems the way their parents had.

The concern turned out to be mostly unfounded, but the reality is almost worse. While Americans are buying more diamond jewelry than ever before, most polished diamonds are getting steadily cheaper. The lower prices and a glut of the type of stones that go into a discount-store engagement ring or pair of earrings have pushed the global diamond trade into crisis.

At the center of the pain are the middlemen who cut, polish and trade the world’s diamonds. Their profits evaporated as polished stones lost value, banks tightened financing, and top producer De Beers held firm with prices it demands for the rough diamonds it digs up.

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2019 Dubai Diamond Conference

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A number of technological disruptions are set to change the shape of the industry. Gemdax moderates a number of panels at the Dubai Diamond conference where industry leaders discuss the opportunities and challenges for miners, the midstream and retailers.

Opening address by Ahmed Bin Sulayem, Executive Chairman and CEO, DMCC – Video

Special address by Sergey Ivanov, CEO, ALROSA – Video

Market Review by Anish Aggarwal, Founding Partner, Gemdax – Video 

Panel 1: Technology Disruption: How will increased manufacturing automation affect our supply chain? 
Moderator: Anish Aggarwal, Founder, GEMDAX
David Block, CEO, Sarine
Bernold Richerzhagen, Founder and CEO, Synova
Faried Sallie, Head of Technology, De Beers Group
Tom Moses, Executive Vice President and Chief Laboratory and Research, GIA
Video

Panel 2: Market Disruption: The advent of lab-grown diamonds – what does it mean for the diamond sector?
Amish Shah, President, ALTR Created Diamonds
Stuart Brown, CEO, Mountain Province
Stephen Lussier, Chairman and Executive Vice President, De Beers
William Shor, Managing Partner, Caspian VC (CVC)
Video

Panel 3: Making sense of the disruption: How do we bring positive change given the disruption and current market conditions?
Davy Blommaert, Head – Diamond Business Corporate and Institutional Banking, NBF
Jim Pounds, Executive Vice President, Diamonds of Dominion Diamond Mines
Biju Patnaik, Executive Vice President and Head, Gems and Jewellery, IndusInd Bank
Martin Leake, Special Advisor for Precious Stone and Gems, DMCC
Video

 

De Beers hits a rough patch as diamond sales slide

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Industry struggling with economic uncertainty and rise of lab-grown stones.

Diamond purchases at De Beers’ latest sale in Botswana plummeted 44 per cent, as the industry struggles with weaker consumer spending and the rise of lab-grown stones.

The world’s largest diamond miner said on Wednesday that sales of rough diamonds were $280m at last week’s sale compared with $503m in the same period a year ago.

The sharp decline follows another weak sale last month. So far this year, at $2.9bn, De Beers’ rough diamond sales are 26 per cent lower than the $3.9bn recorded at the same time last year. In July, Russian diamond producer Alrosa reported a 51 per cent fall in diamond sales.

“The current malaise in the market is due to oversupply,” said Paul Zimnisky, an analyst in New York, who said diamond buyers had too much inventory.

Macroeconomic uncertainty and, in particular, the trade war between the US and China, the world’s two largest diamond-consuming countries, has fuelled nervousness among wholesalers and retailers.

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De Beers Will Let Buyers Reject More Diamonds to Fend Off Crisis

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  • Buyers can sell back more diamonds to De Beers, people say
  • De Beers is making concessions as diamond industry struggles

De Beers will let buyers reject more diamonds at a sale next week as the mining company shows almost unprecedented flexibility to ease a growing crisis.

The Anglo American Plc unit has told customers they can refuse to buy half of the stones offered that are smaller than three-quarters of a carat, according to people familiar with the situation, who asked not to be identified as the matter is private. Buyers will also get the option to sell back some diamonds to De Beers on favorable terms, the people said.

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Anglo’s Diamond Riches Could Be Key If Agarwal Stake Grows

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Much of the focus around Indian mining tycoon Anil Agarwal’s pursuit of Anglo American Plc has been the company’s South African operations. But Botswana could be similarly important.

Botswana is the source of about two-thirds of Anglo’s diamonds and the country is a major stakeholder in De Beers, the world’s biggest gem producer. There are few countries as dependent on a single commodity as Botswana is with diamonds and the nation is highly protective of the industry.

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Dominion Diamond to be taken over by Washington Cos. in US$1.2B agreement

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CALGARY — The Washington Companies has won over the board of Dominion Diamond Corp., one of the world’s largest diamond producers, with a sweetened US$1.2-billion bid.

The privately held Montana firm is offering US$14.25 in cash per share for all stock in Dominion Diamond (TSX:DDC), up from its US$13.50 per share offer that Dominion rejected in March.

“We’re going to be in Canada for a very long time and this was a nice addition to our portfolio,” Lawrence Simkins, president of Washington Cos., said in a phone interview.

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Americans Buying Fewer Gems Puts the Hurt on Diamond Hub Antwerp

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An ugly year for diamonds in the vital U.S. market is piling pressure on Europe’s historic center of the $80 billion global trade.

Diamond trading companies in the Belgian port city of Antwerp, which has been the industry’s trading capital for five centuries, were already feeling the pinch from a tightening credit bubble and thin margins. That’s now being compounded by falling demand from some of the industry’s biggest customers, notably retailers Signet Jewelers Ltd. and Tiffany & Co.

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Diamond Industry Faces Headache as Key U.S. Market Takes a Knock

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In the diamond industry, the only place that really matters is the U.S., and the market is starting to look a little shaky.

In a country where consumers buy almost half the world’s gems, Tiffany & Co. and Signet Jewelers Ltd. this week reported disappointing sales. That’s a blow to expectations that President Donald Trump’s pro-business policies would give consumers more money to spend on luxury items such as diamonds.

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