supply squeeze by 2015 LONDON, April 20 (Reuters) - Rough diamond prices are likely tocorrect after a scorching rebound, but the long-term outlook is bullishdue to future supply shortfalls, a diamond expert said on Tuesday.
Prices of rough or unpolished diamonds collapsed in late 2008 andearly 2009 when consumers shunned luxury goods during the globaldownturn, but a strong rally has taken them above the peaks of 2008,consultant Charles Wyndham told a diamond conference.
'Common sense would suggest that there has to be some sort ofcorrection in rough (diamonds),' said Wyndham, co-founder of WWWInternational Diamond Consultants.
A brief decline would be healthy after the heady climb that sawprices jump 82 percent from trough to peak last year, said Wyndham,also chairman of Polished Prices.
'A correction doesn't mean that it goes down and down, a correctionwould be temporary and then it picks up ... the trend lines remainpositive, very positive.'
A long-term upward trajectory would be supported by the impact of a lack of major new mines being discovered.
The financial downturn has delayed the onset of a supply squeeze byabout five years to 2015, he said. Before the financial crisis, demandwas expected to outpace supply by this year.
Virtually no discoveries of huge diamond mines have been made inrecent years and most of the small to mid-sized mines being developedare still years away from launching production.
'There is a long-term imbalance between supply and demand ... it'snot a question of if, but a question of when,' he told the conference.
Man-made diamonds may help fill a shortfall and should not be seen as a threat by miners, but as an opportunity.
'I think one of the real risks that the industry faces is that theshortfall might be too great and that if you don't have your product onthe shelf, there's a real risk that people start buying other things,'Wyndham said.
Wyndham was a director of the marketing arm of De Beers, theworld's largest diamond producer, before leaving in 1995 to start hisown business.
Besides De Beers, 45 percent owned by mining group Anglo American,major diamond producers include Russia's state-owned Alrosa, Rio Tintoand BHP Billiton .
https://www.finanznachrichten.de/nachrichten-2010-04/16675826-correction-seen-for-diamonds-but-long-term-rosy-020.htm