The mood in the diamond industry has already improved in 2014. Initial reports suggest the Christmas season was better than expected for the diamond trade and the U.S. appears inclined toward growth again. Of course, no one expects the diamond market to boom in the year ahead, but there is a sense that dealers and manufacturers will be more aggressive to ensure that they make money in 2014.
That wasn’t the case in 2013, as this column explored last week (see editorial, “The Diamond Story of 2013”, published on December 27, 2013). Polished prices declined for the second consecutive year and so one can forgive diamantaires for being cautious.
[two_third] However, they’re also frustrated that their profit margins have been squeezed for so long and there is a sense that they’re ready to take additional risk for higher returns. While it is impossible to know exactly what will be in the diamond market, one can make some predictions for the market based on current events and available information. Here’s a look at some of the developments that we’ll be looking out for in 2014.
Rough prices, credit & liquidity
Rough prices are not expected to rise significantly in 2014 as diamond manufacturers are determined to garner better profit margins than they did in 2013. But it’s not going to be easy. They are likely to face continued pressure from mining companies.
“In addition, some expect the company to phase down the sight system and instead put a greater emphasis on its auction business, which currently sells 10 percent of De Beers production.”