Though De Beers chairman Nicky Oppenheimer’s comments about the state of the US market and how it might impact diamond demand don’t state anything that the diamond industry didn’t already know, they’ve just confirmed the Indian cutting and polishing industry’s worst fears.
Oppenheimer was quoted in this report as saying, “Demand for better-quality diamonds is continuing in the subprime-impacted US… but, because of the ‘disproportionate’ volume of ‘lower-quality, cheaper diamonds’ sold there, the subprime crisis is ‘obviously a worry’.
Those who deal in the low end – and in India, that’s almost everybody – have been struggling with sharply reduced US demand for some time now. In many categories, the US is the only place those goods can currently be moved. So it is almost a given that the low end producers are in for a rough year.
In fact, except for the better end and the large sizes, demand has been poor almost across the board. The Indian diamond cutting and polishing industry has not yet come back up to full steam after having tapered off for the Diwali holidays last November. Now it looks like it won’t ever get up to full speed the rest of this year.
The market is now braced for the shakeout that is to come.
