About a year ago, Sergey A. Vybornov, president of Alrosa, declared at the Shanghai Diamond Conference that “low end jewelry” was hurting the industry’s image.
I am not sure about that, although it is clear that the industry’s image is not enhanced by a comment in the New York Times attributed to an Alrosa spokesman (“If you don’t support the price, a diamond becomes a mere piece of carbon”) which has already lead to at least one negative headline.
As long as this article is out there, it’s worth exploring how the crisis has impacted the main producers. Russia, as we have read, is stockpiling – but is now beginning to sell again. BHP and other producers that use variations of a tender system have basically been selling their output, and letting prices fall. De Beers, prohibited by the European Commission from stockpiling, now just cuts back production. This has the effect of hurting the producing countries without really changing De Beers’ response to the market. (Though one could argue that its new method of giving discounts to large sales is in effect a price cut.)
And now, it seems, that the rough market is picking up. But that seems mostly related to the cutback in supply, rather than any increase in overall consumer demand for polished. Hopefully we are not seeing another run-up caused by speculation, rather than business fundamentals.