Diamond to be less popular this year: De Beers CEO Stephen Lussier

KOLKATA: The global demand for diamond jewellery may remain flat this year, compared with 2014 when it rose 3%, as the strengthening of the dollar against all major currencies, coupled with a slowdown in China, are likely to impact consumer sales, said Stephen Lussier, CEO, Forevermark, De Beers, on Monday.

Lussier is, however, bullish about diamond jewellery’s growth in India as the next decade is set to witness 75 million new homes entering the annual income bracket of $5,000-$6,000 per annum, thus triggering demand. Online sales in India, at less than 1% of the total sales, are also likely to attract more buyers. Driven by a growing economy, an emerging middle class, and a culture where precious jewellery plays a key role during social occasions and family traditions, India has become one of the largest consumer markets for polished diamonds.

“Diamond jewellery should be promoted as a product in India’s growing relationship market. It should emerge as a preferred item for anniversaries, Valentine’s day, and other such relation-building occasions,” he said.

US still remains the strongest market globally with demand for solitaires of three carats or more on the rise. “The US market is steady,” he said.

De Beers and Russia’s Alrosa were the largest sellers of rough diamonds last year, accounting for 56% of global sales by value between them.

In volume terms, total rough diamond production actually decreased 3% to an estimated 142 million carats in 2014. The total production value was more than $19 billion, which represented an increase of almost 6% over 2013.

Lussier expressed concern over the supply side of diamond in the years to come. While the development of new green field mines has been limited in recent years, three new mines did begin production last year, with another mine being commissioned earlier this year. In overall terms, these new mines do not contribute significantly to global production.

“But towards the end of the decade, when many existing mines will begin to see declining outputs, overall supply is likely to plateau,” Lussier explained.