a regular feature provided by RM Weare & Co
2015 has been a difficult year for the polished diamond trade.
Unsustainable high rough prices have squeezed profitability for the polished market which has been exacerbated by the drop in
demand at the retail level. Adding to the diamantaire’s difficulties has been their large inventories of rough that has been built up in previous ‘better times’ and the departure of sectors in the banking industry from the diamond market leaving problems in finding capital investment. This has led to some dumping of stones onto the market
in an effort to reduce exposure to unmanageable debt levels.
At the retail level this led to a significant fall in prices for some diamond sizes and difficulties in supply for the smaller better quality stones. In response to the high rough prices the polished sector has refused to buy unprecedented levels of rough being offered at sights in the latter half of 2015. This has led to a decrease in polishing and subsequent redundancies withinthe Indian polishing trade.
The decrease in sales of rough has resulted in a significant reduction in revenue for the government of Botswana and necessitated the
state purchasing of $1billion diamonds from a state owned company in part to support the Yakutia diamond mining in Russia.
2016 should see the persisting shortages of supply lead to growing demand and subsequent price increases. The reduced polished diamond sector will see the survivors benefit from the recent cull of competitors however the good days are still yet to come.
Within Europe there has been a continuing trend for natural brown diamonds with requirements for multiple 0.30ct and smaller
layouts. There has also been a definite increase in the demand for 1ct+ old cut diamonds, either as matching stones for existing jewellery or for new pieces. This trend underlines the continuing popularity of the vintage/ heritage styles especially within the UK. However, the demand is serviced by very little supply and consequently commercial to good quality stones sell at near round brilliant prices and in 3ct+ sizes there is likely to be a premium.
Within the coloured stone market Sapphires in precise well cut and graded fine quality material has been in demand. The high prices of 1.50ct+ straight sided stones have meant that requirements are settling for cushion shapes. For Emeralds, there has been noteworthy demand for single stones in fine qualities. Generally, we feel that the UK market has still not accepted the high prices required for top quality Emerald even though sales of one off top quality material are going through.
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