Abstract Beijing time on the afternoon of November 4th, according to the market observation website, for consumers, the decline in diamond prices is good news. However, from the perspective of investment, there is still room for further decline in the price of diamonds, because the demand for diamonds in the Chinese market has weakened, and the diamond market has appeared to be used...
Beijing time on the afternoon of November 4th, according to the market observation website, for consumers, the decline in diamond prices is good news. However, from the perspective of investment, there is still room for further decline in the price of diamonds, as the demand for diamonds in the Chinese market has weakened and the diamond market has experienced an oversupply situation. Nicholas Colas, chief market strategist at Convergex, a US investment company, warned on Thursday that those who want to invest in diamonds should invest in the best quality diamonds because, overall, diamond prices are weak and diamond mines are widespread. In the face of oversupply, many diamond miners have recently reduced diamond production.
Klaus pointed out that the diamond producer crocodile Alrosa announced its third quarter 2015 earnings report, which sold only 42% of rough diamonds. Erosa plans to hoard the remaining unsold rough diamonds and wait until the price rises before selling.
Recently, the diamond miner Anglo American Group has taken measures to reduce production by 27% in response to the situation of lower drilling prices. Its subsidiary is De Beers, a famous diamond company. Rio Tinto Mining Group also announced that it will reduce its diamond production.
Diamond prices have gradually declined since 2011. Klaus pointed out that the following table from the PriceScope website can clearly indicate the trend of drilling prices in recent years. The price of all types of diamonds peaked around mid-2011, during the same period in the emerging markets of the economy and the stock market after the peak of the financial crisis era.
Klaus said: "First of all, the price of diamonds was obviously affected by the volatility of China's economic slowdown in 2015, and the US and Indian markets in a better situation could not stop the price decline."
China is the second largest market for finished diamonds, with the United States ranking first and India third.
“The second point is because the price of diamonds seems to be always looking for the bottom. Every aspect of the supply chain has inventory, from rough diamond suppliers to retail stores. That's why the price of diamonds has fallen so fast. Why is it taking a long time? To restore the price."
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