Reductions of rough supplies on the part of the producers have proven instrumental in calming the diamond market, according to Moti Ganz, president of the International Diamond Manufacturers Association and chairman of the Israel Diamond Institute.
“In the last quarter of 2011, the global demand for rough diamonds will run at about $1.2 billion less than the $4.6 billion sold in each of the first three quarters,” said Ganz in a statement. “The reduced demand for cheaper and small diamonds in the U.S. market is partly offset by a strong demand from the Indian and Chinese domestic markets, but the consumers in these new emerging markets demand bigger and higher quality goods.”
Ganz also stated that the industry’s recovery is continuing. Manufacturers will process some $16.9 billion worth of rough diamonds this year, a 27 percent increase over the $13.3 billion of 2010. He expects the diamonds available to the jewelry sector will grow by 5.3 percent from $18.9 billion to $21.9 billion this year.
“The changing consumption patterns require a shifting of manufacturing focus in the cutting centers, which partly explains the unease in the rough markets in which certain (cheap) goods cannot find buyers even at two-digit marker discounts, while goods which are in demand are hard to find,” said Ganz.
He applauded the decision by the DTC to limit the next sight allocation to $300 million, following the previous sight of $440 million: “These reduced allocations will further help to calm the market, which has recently seen vacillating prices in light of changing consumption patterns.”
The DTC is also assisting clients who can postpone their purchases to when they need the goods for manufacturing and have the financing in place to pay for their sight boxes. “These supply restraints will undoubtedly improve the atmosphere in the entire diamond supply pipeline, creating also much needed upward pressures on polished diamond prices,” said Ganz.