Davy Blommaert, head of diamond lending at Dubai-based National Bank of Fujairah (NBF) and a former executive of Antwerp Diamond Bank (ADB), took time out recently to speak to Rapaport News. Blommaert spoke about the diamond trade’s increasing risk profile, which has forced players such as ADB, Bank Leumi, and, just this month, Standard Chartered, to exit the industry, contributing to Dubai’s rise as a diamond center.
Rapaport News: How’s the diamond market at the moment?
Blommaert: I’m hoping 2016 will be better than 2015 but I don’t expect too much growth. The first quarter was good and the second quarter okay. We’ve seen difficulties in the diamond sector but we must also look at it in context of the global economy. Compared to other commodities, diamonds are doing okay.
The mining companies started to act responsibly in the fourth quarter of last year when the market demanded profitability from their rough. They reduced supply, prices were amended and profitability was restored at the beginning of 2016. There was also an opportunity to clear out some polished inventory last year since supply was limited in the final three months of 2015. There was some anxiety to get manufacturing going again in 2016 so we had a bit of a spike in rough buying, but the miners continue to act responsibly.
Are you worried about a potential oversupply in the market?
Blommaert: The market is stable right now. It’s not like it was in the first quarter when everyone went a bit crazy as they resumed production. The second quarter is historically a slower period, but I think we’ve reached a delicate balance which can be sustained as long as the miners act responsibly and the market doesn’t buy rough at crazy prices.
What role did the banks play in contributing to the increased supply of rough last year?