As I recalled the reports that I had recently read, I wondered whether I could have envisioned with certainty what 2014 would hold for the diamond industry. The truth is, it is very difficult to have “certainties” when it comes to diamonds.
However, it matters to us all – readers and contributors of this website, journalists, diamond industry and high-end jewelry professionals – to know whether the future of diamonds will be rosy. In the end, it is more or less, for us all here, our bread and butter. Anything that could help us make forecasts or a short or long-term strategy would be most welcome!
What will 2014 be about?
Will 2014 be, if not a great year, at least a good one for the diamond industry? As manufacturers and retailers are still trying to strike the right balance for their margins and as we look for answers to this question, our noses are stuck, and rightly so, in the demand and prices for rough as well as for polished, doing rather well in this first quarter for that matter. But demand is always on the rise at this time of year, consequently boosting prices (5-6 percent premium on the DTC boxes on the secondary market – The rough diamond market report: sizzling again). So here we are, on the look-out for indicators of market trends, such as the recent Hong Kong fair, which had positive results, Baselword and The Diamond Show coming up, and the JCK International Jewelry Show at the end of May, beginning of June.
Ethics, synthetics and CSR will undoubtedly once again be on the forefront in 2014. The recent backlogs at the GIA are worrisome for an industry where certification is necessary. While the KP was much less present in 2013 than in 2012, it remains a vital instrument for our industry, and the issue regarding the definition of conflict diamonds is still without a real solution…
Rare diamonds and large stones also remain a hot topic. According to Avi Krawitz, their prices “are considered reasonable given that these stones are genuinely rare. […] The fact that the overall rough market has been so strong so far this year further boosts the large-stone market.” (The special rough market).
We could also mention India’s credit crunch, the major trends in jewelry, the slow growth and the transformation of the Chinese market, Botswana as the new trading center, the future of generic advertising and of the WDM, about which we impatiently await concrete news.
So many definite and important themes, but still so few fundamental certainties…
An industry with a constant aura of mystery
You need to have a lot of experience and to have worked in or studied the diamond industry in order to understand its ins and outs. And, possibly, to have strong intuition?
The diamond world has a constant aura of mystery.
Take for example the general press, which has of late, and sadly not without reason, laughed to scorn journalists specialized in the diamond industry and jewelry – Edahn Golan, Michelle Graff, Victoria Gomelsky and Rob Bates, to name a few. Obviously, the general press often publishes – certainly not always – commonplace assumptions on diamonds in general, and continues to convey wrong ideas, notably concerning conflict diamonds.
But is it that easy to find the right information when you are not part of a sector? To know the good information sites? We, journalists and analysts, work on the quality and the veracity of the information we publish. It is a seemingly impossible challenge to find reliable information on the diamond industry when you do not know where to look or what the relevant sites are. Not to mention trying to find some in French!
“Diamonds” prove to be a niche trade: always so secretive. Information is given with caution, on the sly – and it is important to have been recognized by the professionals, and to be part of a venture that can warrant first-hand information (price or market analysis)…
Thus, how to make a good analysis when you do not know that prices in this sector operate on a cyclical basis within the very same year? Or that profit margins, for those who buy and sell polished, are in any case low? Or that lab-made diamonds appeared on the jewelry market only recently…
I see a lot of “maybe”, “we can assume that”, and “if the major diamond miners increase rough prices, we can expect…”. Of course, it is part of every journalist’s job to surmise and to take precautions when writing. You would not believe the fuss at the slightest inaccuracy.
The upshot of all this is that I have an idea of what we can expect in the diamond industry in 2014? But I am definitely not certain of anything.
The diamond world is really fascinating.