Gaborone: After the publication of De Beers’ 2014 Diamond Insight Report the diamond company identified new global and regional trends which involve changes in macro-economic trends in emerging economies, as well as volatility in world economic growth forecasts.
De Beers also stressed the need for diamond industry participants to strengthen their competitive capabilities through better planning and more investment in innovation and marketing.
The new 2016 Diamond Insight Report focuses on a range of new market developments to come, namely new consumer preferences, with millennials becoming the increasingly more important age group, and economic empowerment driving purchases among women. Also, the rising competition from other luxury categories is set to increase product customization and retail innovation, argues De Beers.
Meanwhile, financing challenges for midstream are expected to persist, and polishers will have to adapt by adhering to tighter lending and professional standards, leading to more transparency of the supply chain.
As for diamond producers, larger share of rough diamonds is expected to come from ever deeper mines, which are complex and costly to operate. Additional investment is required by producers to drive productivity, says De Beers, though production is expected to remain predictable and relatively stable over the next 10 years.
According to De Beers analysts, while consumer demand for synthetic diamonds is currently negligible, the capacity to produce synthetics for gem applications is likely to continue to expand. Over time, the production cost and value of synthetics are expected to reduce.
Independent analysts from major banks expect diamond jewellery sales to grow driven by the U.S., while pressure on midstream margins are seen to persist. Their findings are for major part consistent with those of De Beers' Report.
