Hopes glimmer as US diamond demand warms up
Mbongeni Mguni | Tuesday August 20, 2024 10:21
The United States is the most important market for natural diamonds, accounting for about 54% of annual demand, followed by China and India. According to a report released by leading diamond retail research firm, Tenoris, in July, overall revenue from loose and finished natural diamond jewellery sales climbed 8.5 percent as consumers increased average spend per unit by five percent. “Year over year, loose natural diamond sales rose 4.2 percent by volume and a very handsome 10% by value. This provides some relief as the diamond industry struggles with a steep drop in demand from China.
How did this happen? The average expenditure on a natural diamond increased nearly one percent month over month and by 5.7 percent year over year as demand tilted to larger size diamonds,” Tenoris researchers said last Wednesday. According to the firm, if the rise were only in value, the good performance of natural diamonds in July could be subject to question. “After all, the rise in value could mean that the affluent buyers are spending more, while the rest are spending less. “However, the distinct rise in units sold says US consumers are not just spending more on natural diamonds, they are actually buying more diamonds. “Further, because we are looking at loose diamonds, this means that more consumers are interested in customised jewellery. “They pick a semi-mount of their liking and separately select a loose diamond,” Tenoris researchers said.
Natural diamonds have been in a slump since the second half of last year, owing to oversupply in the midstream and retail end, as key markets such as the US and particularly China, have underperformed. The growth of synthetic diamonds, powered in part by anti-sentiment against the continued flow of sanctioned Russian diamonds in the market, has undercut natural diamonds, hurting producers such as Botswana. De Beers has cut production targets three times this year, asking its units such as Debswana, to slow output as a way of resuscitating demand in the midstream, which consists of the numerous cutting and polishing firms mainly in India, as well as in the retail end.