Diamond demand to rise 4.5pc this year, De Beers says

PUBLISHED : Thursday, 12 June, 2014, 2:32pm
UPDATED : Thursday, 12 June, 2014, 2:32pm

Leading diamond producer De Beers said it expects global demand for polished gems to rise by up to 4.5 per cent this year thanks to the US market recovery and a bouyant China and India.

“The global economy is still not doing very well, but we are lucky that we have a good mix of countries and that the middle class is growing, which means our industry isn’t doing too badly,” chief executive Philippe Mellier said. “Demand continues to grow.

“The largest global market for diamond jewellery is the United States, and everyone knows they are taking off again.”

The second-largest diamond consumer, China, including Hong Kong and Macau, accounts for up to 13 per cent of global demand.

“More and more Chinese are achieving the buying power to acquire jewellery and diamonds, especially when they get married,” Mellier said.

De Beers also expects “good to very good” second-quarter results in India, which has become “a potentially large source of diamond demand”.

The country “has for a long time been a market for gold jewellery, often sold by weight, but for a few years now, diamonds have been making inroads in jewellery, and it works very well”.

He hailed new Indian Prime Minister Narendra Modi as a “fervent defender of an industry which he knows well, the diamond industry”, having been governor of Gujarat state, known for its diamond polishers.

Founded in 1888 in South Africa, De Beers was taken over by British giant Anglo-American in 2012. Anglo-American now controls 85 per cent of De Beers shares, while the government of Botswana retains 15 per cent.

Rough diamond prices have stabilised since last year after frenzied post-financial-crisis buying drove them to a peak in 2011.