The improving economy in the U.S. and growth in Asian countries like India and China will likely lead to sales growth in 2005, Gareth Penny, the managing director of the Diamond Trading Company, said.
He added that “demand for diamonds has never been higher” and growth of about 5% was possible.
“America did quite well in the first half” of this year, Penny said. “It came off a little bit in the third quarter but it seems to be coming back again. India and China are huge growth markets and the diamond acquisition culture in India in particular is huge.”
Penny said that “brides in China are getting diamond fever,” noting he expects the size of the Chinese market to one day grow to the size of the American market.
Indeed, a recent survey by the Hong Kong edition of China Daily said the Chinese domestic diamond market could increase as much as 20 percent this year over 2003’s record $2.36 billion. It also said that sales could skyrocket when China fully deregulates diamond imports as part of its WTO commitments. By 2010, the Shanghai market could grow to $5 billion, the newspaper said.
De Beers Sees Rising Prices
De Beers spokesmen predict that diamond prices will keep rising now that supply is failing to keep up with demand. The company has raised prices three times over the last year, to 14% overall.
With global sales predicted to grow 50 percent by 2010, there may be shortages around 2007, analysts said.
To boost supply, De Beers is increasing its diamond exploration budget, as are other producers.