Rough diamond demand in 2016 is reported to have increased, supported by consumer demand and the midstream re-stocking following a period of weaker purchases towards end of 2015. This is according to the Diamond Insight Report released by De Beers Group on Thursday. The report says consumer demand for diamond jewellery also saw marginal growth last year driven by strong performance in the US, where demand is said to have exceeded $40 billion for the first time while the strength of the US dollar weighed on performance in some of the other key global markets for diamond jewellery sales. These trends – according to the report – have continued into 2017 with improving retail sentiment being reported in the important Chinese and Indian consumer markets.
Rough diamond sales are said to have been steady so far this year while rough diamond production has increased on the back of demand from cutting centres which is understood to be a reflection of normal trading conditions. On the global polish diamond demand share the US takes the lead at 47 percent followed by China at 16 percent. Demand in the US has grown from 45 percent in 2015 to 47 percent in 2016 as demand from consumers grew while in China growth was stagnant 16 percent. Rough diamond sales to cutting sales increased by 19 percent in 2016 to an estimated $16 billion with De Beers and Alrosa remaining the two largest suppliers of rough diamonds accounting for 37 percent and 27 percent of global sales to cutting sales in value terms. The increase in rough diamond sales in 2016 was reportedly due to midstream re-stocking activity following a period of reduced rough diamond buying late 2015. Looking ahead the report says changing expectations from a range of industry stakeholders are set to have a significant effect on the future success of midstream businesses. According to the Insight Report, the evolution of consumer behaviours and attitudes in the major consumption countries will require midstream participants to formulate flexible business models that add more value downstream and also differentiate their offerings through better consumer understanding, design innovation, enhanced branding and pipeline insight. It is expected that the recent trend towards greater marketing investments from industry players across the value chain will help support this. But the report says midstream businesses will need to adapt to adapt both product and service offerings if they are to maximise their opportunities. Furthermore, diamantaires are said to be under increasing pressure from primary suppliers, banks and tax authorities to impose higher standards of corporate governance and financial transparency.
Women buying jewellery
In a change in trends, the Insight Report indicates that as more women across the world are in paid employment and their earnings are on the rise, they are now buying diamonds for themselves. The report says De Beers’ research has shown that women are increasingly active purchasers of diamond jewellery. It is reported that in 2016 in the US 31 percent of all women’s diamond jewellery was bought by women themselves. Self-purchasing of non-bridal diamond jewellery pieces grew in the US by more than a third between 2005 and 2015, reaching 33 percent, the report says. One country with a unique purchasing profile is said to be India, where self-purchasing is an established cultural norm.