Diamond articlePrice for Diamonds Will Hit 'Unprecedented Levels' Due to Emerging Markets
By Dialog NewsEdge
Posted: 10/17/07 08:19 [Submit Comment]
(RAPAPORT) Toronto Star: Putting off popping the big question until you find the right price for a diamond ring? You might want to get moving.
Diamond prices may soon be their highest ever, industry experts say, thanks to growing demand from new markets, boosting the cost of that engagement ring as much as 10 percent.
"If you are actively involved in the production and sales of diamonds, the future looks extremely bright," James Allan, a diamond analyst for South Africa finance group Allan Hochreiter, told a diamond mining conference in Sydney, Australia, yesterday.
At another meeting in Antwerp, Belgium, the president of Russia's ALROSA said diamond prices will rise to "unprecedented levels" as demand outpaces production.
"For the first time, the market faces a growing deficit of rough" diamonds, ALROSA's president Sergey Vybornov told a conference organized by the Antwerp World Diamond Centre. "This will shake the very foundations of the full diamond market."
ALROSA is the world's second-largest miner of gems.
"There is not enough supply coming up within the next five to 10 years to meet the demand just based on GDP growth," said Chris Ryder, marketing director for miner BHP Billiton. "We are optimistic about the diamond market."
Demand for rough diamonds, or gems that haven't been cut or polished, will rise to almost $20 billion by 2012, Vybornov said, citing industry estimates. Mine construction isn't keeping pace with demand fuelled by a growing world economy.
Consumers worldwide spent $65 billion on diamonds in 2006, and this year will splurge even more, Allan said in Sydney.
That would equate to a rise of about $9, to $99 per carat, he said.
The United States accounts for about 43 percent of all diamond sales, while China's growing affluent class is luring more people into jewelry stores.
"In China, about 40 percent of women are now getting married with diamond rings," Allan said, noting the trend is expected to increase significantly.
Consumers in India, too, are adorning themselves with more diamonds than ever before, displaying a growth rate of 26 percent in 2006. "So as demand increases and supply decreases, the market will balance itself by sharp increases in the price of diamonds from next year through to 2015," he said.
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