Demand in the US, which now accounts for more than half of the world’s diamond consumption, rose 4.4 per cent to a record US$41 billion last year, top producer De Beers said in a report this month. That helped offset contractions in China and India, where the company will be stepping up marketing to revive growth. Global demand edged higher by 0.3 per cent, to US$80 billion.

The US has been a bright spot in the diamond industry, expanding its market share in the past six years as wage growth, job creation and a strong stock market helped boost consumption, according to De Beers. That contrasted with purchases in key growth market India, where a jewellers strike and the demonetization campaign led to a 13 per cent contraction. Demand fell 10 per cent in the Gulf region as oil prices remained depressed.

“While the US drove global growth in 2016, it is increasing demand from emerging markets that is behind the last five years being the strongest on record,” said Bruce Cleaver, chief executive officer of De Beers. “Despite some markets facing challenging conditions last year, we see this trend continuing, with improvements in demand from China and India, in particular, emerging in 2017.”

De Beers expects a better performance in its key Asian markets in 2017 that should lead to “marginal” growth in global demand this year.

“Sentiment in oil-producing countries was poor because of the impact” of lower oil prices, Stephen Lussier, CEO of De Beers’ Forevermark, the company’s diamond brand, said in an interview at Bloomberg headquarters in New York. “Demand will be subdued until we see overall economic improvement.”

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In the US, there have been signs that President Donald Trump’s pro-business policies are failing to boost consumption of luxury goods. Last week Tiffany & Co. and Signet Jewelers . reported disappointing sales and there are concerns about the amount of rough diamonds sold by the top producers in the first quarter. Yet De Beers remains optimistic, undeterred by concerns about oversupply.

“Demand for rough diamonds remains strong,” Lussier said. “There are no plans for any reduction in production targets for this year. Polished prices have been steady and are inching up marginally.”

One of De Beer’s biggest challenges, however, is managing global shocks.

“The world is so volatile,” Lussier said. “There’s no doubt that the volatility impacts confidence and discretionary spending.”

To combat that obstacle, the company is stepping up its marketing this year and will continue its push to target couples, millennials and single women, which represent a new growth opportunity, he said.

De Beers sold US$1.86 billion in its first three sales of 2017, including a US$720 million offering in January, its biggest in at least a year. Alrosa PJSC, the second-biggest miner, increased first-quarter sales by 17 per cent to 12.1 million carats.

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