| Date: |
28-01-2016 |
| Subject: |
Diamond miners like De Beers, Rio Tinto lower rough diamond prices by 5-7% |
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KOLKATA: Diamond miners like De Beers, Rio Tinto and ALROSA have lowered rough prices by 5-7% beginning this month, making the sparkling stone attractive for buyers.
According to traders and retailers, this is the right time to invest in certified diamonds as prices have bottomed out and are set to rise from here, with miners cutting down on production in order to put a check on the supply side. De Beers has decided to close down its Snap Lake mines in Canada's Northwest Territories and may shut the Damtshaa mine in Botswana as well.
The metro markets are already seeing a surge in purchases of solitaires.
"The demand is mostly in 1-carat solitaire category whose prices have fallen to 2.5 lakh from Rs 3.5 lakh a year ago. Solitaire purchase has gone up by 15-20% year-on-year," said Rajiv Popley, director at Mumbai-based jewellery firm Popley & Sons. "Along with solitaires, smaller diamonds are also being picked up by consumers."
Sentiment in the market for polished diamond improved in December, as shortages supported prices and dealers filled last-minute holiday orders, said industry sources.
Initial reports about US holiday season jewellery sales are positive. General retail sales were up about 8% with online mobile sales up 50% to 60%, according to a Rapaport report. However, there is still very limited dealer and retailer diamond inventory buying due to uncertainty about US post-holiday demand and the Chinese New Year. In the local market, some more correction may be required for demand to pick up decisively.
"Prices of rough diamonds should fall further by 8-10% to see demand coming in. The manufacturing sector is still not making money. However, after Diwali break, the market has opened on a firm note. We are keeping our fingers crossed," said Ashok Gajera, managing director of Laxmi Diamonds, a Mumbai-based supplier of loose polished diamonds to jewellers.
The correction by mining companies has not impacted polished prices much as import is taking in dollar terms. With the rupee weakening against the dollar, manufacturers are unable to reduce polished prices.
India imported 955.44 lakh carats of rough diamonds from April to December 2015, which were 15.27% lower from a year earlier. Exports of polished diamonds dropped 5.74% to 244.05 lakh carats in the period.
"The US is showing reasonably good demand. But demand from the Far East and China should pick up," said Vipul Shah, former chairman of the Gem & Jewellery Export Promotion Council.
Source : economictimes.indiatimes.com
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