Wednesday, October 27, 2010

Diamond industry - Quick facts

Diamond industry was not looking good in 2009, and many experts believe that diamond industry will not fully recover in 2010 though the end of 2009 already showed some signs of positive trend that should continue in months to come.

It is difficult to tell how much exactly has diamond industry recovered in 2010 as some people involved in diamond industry say they are at 50 percent of their previous level of activity, while others say that they are at 80 percent.

In 2009 banks have saved many diamond companies by providing them credit so they could keep operating despite obvious losses.

Since the end of 2009 there is an increased demand for diamonds in fast emerging diamond markets like China and India.

When recession was at its worst in 2009, diamond producers cut heavily their production of diamonds in order not to overflow the market with diamonds.

It is realistically to expect that the recovery of global diamond industry will take at least two or three years to fully recover from the 2009 recession, because many people still fear to spend big as they did before.

De Beers Group is still considered by many as the monopolist at world's diamond market but it will very interesting to see whether the challenges from Canadian diamond industry as well as Russian diamond dealers will change the global diamond industry perspective, and make De Beers less dominant.

Some estimates say that global diamond industry has worth of around $65 billion.

The share of synthetic diamond industry in total diamond industry is still very much negligible, and is estimated to be less than one percent.

In India, 70% of the world's diamonds are cut and polished.

US is still the dominant force in the world diamond industry despite lacking rich natural diamond resources like some African states, or its neighbor Canada. In years to come China's economic boom will threated to overtake U.S. as the world's largest diamond consumer but currently United States still remains a key market for retail diamond sector because U.S. currently accounts for more than half of global diamond jewelry sales.

Demand for diamonds in U.S. is still big with retail sales of over $ 30billion despite the recession and is expected that as soon as economy fully recovers so will the diamond industry because of its long tradition in United States.

New York is one of the world's largest centers for high quality diamonds. U.S. mostly imports rough diamonds from African countries such as South Africa, Botswana, and Democratic republic of Congo. African rough diamonds roughly represent three quarters of total U.S. imported diamonds and so diamond industry in United States must also ensure that these diamonds are conflict free.

In US rough diamonds represent very small share of totally imported diamonds. This is because majority has already been cut and polished elsewhere (from countries like Belgium and Israel) before being imported in United States.


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