Meltdown hits demand for diamonds

Oct 14, 2008

By Jumana Shah

ANTWERP: The meltdown has taken some sparkle off the diamond, too. Diamantaires in Antwerp are expecting a 25% decline in business in the coming Christmas season, the mainstay of the industry.

Experts said North America is the biggest consumer of luxury diamonds, both in terms of value and volumes.

With the US economy in recession, expensive jewellery is the first item to go off the shopping list of most North Americans.

“The US is responsible for 50% of the total diamond consumption worldwide, not so much in terms of volumes but value. Advance bookings for the Christmas season that usually begin at this time of the year, are few,” said Mehul Kothari, member of the board of directors, Diamond High Council of Antwerp.

Like most other businesses, they expect the rough weather to last at least a year. “Even if the markets recover, it will be some time before people are confident again to buy luxury products like diamonds,” said a US-based diamond broker who was in Antwerp to discuss the changing situation with clients.

However, if you think the diamond set you have been eyeing for some time will get cheaper because of the slowdown, there is disappointment in store.

“There is no question of diamond prices coming down. Demand may have fallen but costs of all associated processes are still the same. Mining companies have not reduced prices of roughs. Margins are very tight,” a senior diamantaire said requesting anonymity.

Source: DNA India

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