21 May 2019
DiamondWorld Directory
Home |
Archival
Home
The Global Diamond Industry 2018: A Resilient Industry Shines Through
Bain Report
By: Diamond World News Service
|
Mar 18 2019 12:50PM
|
Reference: 17076  

DecreaseIncrease
While much attention has been paid to millennial buyers, their successors in Generation Z have been gaining buying power, forcing the industry to rethink marketing and sales strategies. Self-purchase sales and social media shopping are expected to increase, attracting younger generations of diamond buyers with distinct preferences.

Recent developments in the lab-grown market
Lab-grown diamonds have existed for more than 60 years, with limited effect on the natural gemquality market. But advancements in technology have pushed the lab-grown market into a more competitive position. Most notably, new chemical vapor deposition (CVD) technology deeply cut the cost to produce larger, higher-quality diamonds. Today, it costs $300 to $500 per carat to produce a CVD lab-grown diamond, compared with $4,000 per carat in 2008.

As production costs have dropped, retail prices have followed. The retail price of gem-quality lab-grown diamonds nearly halved in the past two years, while wholesale prices dropped threefold. Prices are expected to decrease even further as production efficiencies increase, new competitors enter the market and the segment commoditizes.

Lab-grown diamond producers have two options: to pursue gem-quality production for retail jewellery sales or to produce diamonds for high-tech applications. The latter option has the greatest potential for long-term growth and profitability, as well as low barriers to entry. Sensors, semiconductors and medical cutting tools, for example, present an emerging market for CVD-produced diamonds.

The current gem-quality, lab-grown polished diamond capacity is estimated at 2 million carats majority of which is melee (diamonds size less than0.18 carats). By 2030, the market could grow to between 10 million and 17 million carats, if the segment can sustain its current growth rate of 15 per cent to 20 per cent annually supported by consumer demand and attractive economics. But the report believe manufacturing capacity will be a major limiting factor in the short to medium term. Ultimately, marketing and consumer perception will determine the effect of lab-grown diamonds on the natural diamond market. Three scenarios exist: Consumers could perceive lab-grown and natural diamonds as interchangeable, as two different products, or somewhere in between. Marketing could uphold the value of natural diamonds, especially if the prices of lab-grown diamonds continue to drop. It’s probable that consumers will view lab-grown diamonds as fashion jewellery but not luxury goods, limiting the effect on natural diamond demand.

Updated supply and demand model
Based on the analysis, the report expects natural rough diamond supply to change at an average annual rate of negative 1 per cent to 1 per cent in volume terms through 2030. The report expects demand to grow 0 per cent to 2 per cent in real value terms during the same time frame.

The current outlook versus the forecast from the previous year incorporates revised macroeconomic forecast, possible demand substitution from lab-grown diamonds, and reflects fundamental supply and demand factors rather than shortterm fluctuations. The short-term supply-demand balance depends on the actions of major producers and efficiencies along the diamond pipeline.

The report expects China and the US to maintain their leading roles in the diamond jewellery market. Real GDP growth of 2 per cent to 3 per cent per year will fuel US demand, and expansion of the middle class will reinforce China’s positive longterm demand trend.

India continues to show promising signs of growth, even amid its current market challenges. As India’s middle class expands and bridal jewellery is adopted, demand should follow. Europe and Japan are expected to remain relatively stable, with modest long-term growth prospects.

The rough diamond supply is reasonably predictable over the next 5 to 10 years. However, financial challenges, production mix updates and overall uncertainty over future market conditions could force or delay production. As mining companies can adjust output to react to changing market conditions, production may fluctuate at existing mines.

The report based the rough diamond supply forecast on an analysis of existing mines and anticipated production at planned new mines. The report’s projections also include potential supply from new sources, such as tailings from older mines, reopening of distressed mines, activation of options in resource development plans and recycling of secondhand diamonds.

First | Previous | 1 | 2 | 3 | 4 | Next | Last | All

Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
Advertisement
HouseAd_Trade Fair
Search News by City
Advertisement
Kosher 23460
Advertisement
HouseAd_Trade Fair
Recent Issue
2019
AVAILABLE NOW...!
Advertisement
Kosher 23460
News in Pictures
Videos
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
Spotted: Who Wore What (August 2018)
Pictures: 4
Spotted: Who Wore What (July 2018)
Pictures: 5
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 13733
GJEPC Chairman Interview
Views: 12578
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 19464
Promo for IJ Awards 2012 at NDTV Profit
Views: 31996
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 35046
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 10187
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 33398
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 31536
Member of:
Supporter of: