[miningmx.com] – DIAMOND jewellery sales in 2015 were forecast to be positive with the US market, which accounts for 46% of the value of the global diamond jewellery market, driving retail growth, De Beers said in its latest survey.
“Retailers are … positive about the prospects for 2015 and, while there are some potential headwinds, the stage is set for another good showing across the major consumer markets,” said Philippe Mellier, CEO of De Beers.
Mellier’s comments will be sweet music to Anglo American, which owns 85% of De Beers and benefited from a stand out performance from the diamond miner and marketer in its 2014 financial year.
De Beers contributed $1.4bn to earnings – roughly 42% of Anglo’s total – while diamond sales were $6.5bn. “De Beers is rapidly developing into the company’s flagship business unit” said Investec Securities in a February 13 report.
Commenting on the outlook for jewellery sales this year, De Beers said that optimism among jewellery retailers was highest in the US and India, while growth in China was expected to “pick up” after the Chinese New Year.
Global demand for diamond jewellery grew by 3% in 2014, rising to a new $81bn high, said De Beers in its report today.
Consumer demand in the US was 7% higher than 2013 levels reaching $37bn while China demand was 5% higher in 2014 at $10bn – below 2013 but off a high base, De Beers said. The Indian market saw growth of 3% in local currency terms, with lower consumer confidence in the first half offsetting a stronger second half, it said.
Commenting on the longer term prospects for diamond jewellery sales, Mellier said middle class household growth was a key metric to watch.
“As the number of middle class households in the major consumer markets is set to grow by hundreds of millions in the years ahead, the medium to long term prospects for the diamond industry are also exceptionally strong if the right investments continue to be made across the value chain,’ he said.
The diamond market has been under pressure lately with rough prices for gems falling 6.9% in the final quarter of 2014 – the largest quarterly decline in two years. The mood was further darkened as banks tightened credit to cutters and polishers who were forced to sell more inventory.
However, GEM Diamond CEO, Clifford Elphick, said earlier this week that there had been a stabilisation and resurgence in rough diamond sales.
