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(MoneyNewsWire.Net, April 19, 2018 ) Diamonds to Outpace Gold on Asian Spending
by Soraya Permatasari and Rajesh Kumar Singh- Bloomberg – December 28, 2011
Diamond prices are poised to rise for the next four years, outpacing gold, as increased spending on luxury goods in China, India and the Middle East outpaces supplies of the precious stone, analysts said.
Average prices for rough, or uncut colorless diamonds will probably climb 9 percent next year, 1.4 percent in 2013 and 4.8 percent in 2014, according to Edward Sterck, an analyst at BMO Capital Markets. They may gain 2.6 percent in 2015 and 3.2 percent in 2016, he said. Gold will drop for three years starting in 2013, following a 19 percent gain in 2012, according to the median of seven analyst estimates compiled by Bloomberg.
Demand for diamonds may grow at double the pace of supply through 2020 because of an expanding middle class in China and India, Bain & Co. said this month in a report that didn’t give price forecasts. The two countries, and the Middle East, will account for 40 percent of global diamond consumption by 2015, up from about 8 percent in 2005, according to Anglo American Plc (AAL) which controls De Beers, the world’s largest diamond miner.
“We expect emerging nations, first and foremost India and China, to drive demand for colored and colorless diamonds in the upcoming years” said Vladimir Sergievskiy, an analyst at Moscow-based Finam Investment.
Supply Shortage
Global demand for colorless diamonds will probably outstrip supply by 7 million carats in 2016, compared with a shortage of 1 million carats this year, Sergievskiy said, Prices may climb 9.7 percent next year, 2.7 percent in 2013, 3.3 percent in 2014, 3.2 percent in 2015 and 3.1 percent in 2016, he said.
Rough diamonds have advanced 24 percent this year, according to an index compiled with Polished Prices.com, helping OAO Alrosa, the largest diamond miner by output, and Anglo American post profit gains.
Polished diamonds will perform better, reflecting growing Asian demand for diamond jewelry and “flattish supply,” said Platt, who expects prices to increase 4.7 percent in 2012, 9.3 percent in 2013, 6.6 percent in 2014 and 4.4 percent in 2015.
“The current gold price doesn’t reflect the underlying supply and demand fundamentals,” Rob Henderson, chief economist at National Australia Bank Ltd., said by phone from Sydney. “It much more reflects an artificial demand for gold as a hedge and as a store of value against inflation. That means the market is prone to a pretty substantial correction sometime in the future.”
Spending Power
That contrasts with the diamond industry, where prices “have not been inflated by artificial demand to the same degree,” Henderson said. “As countries like China and India keep growing and the size of the middle-class population rises, more people will be able to afford diamonds.”
Global demand for the colorless gems is estimated to grow an average 6.4 percent a year to almost 247 million carats by 2020, while output is likely to rise an annual 2.8 percent to 175 million carats, the Bain report said. Output reached 133 million carats last year. Demand for diamond jewelry will climb to more than $100 billion by 2015 from $73.6 billion in 2010, Platt said.
While the volume demand for polished colorless diamonds is expected to grow in the “low single digits” in the U.S. for the next decade, it may increase by as much as 15 percent in China and India, said Laxmi Deepak, an analyst at Mape Securities Pvt. in Mumbai.
China overtook Japan to become the biggest buyer behind the U..S., where demand rose 7 percent last year, compared with 25 percent in the communist nation, according to De Beers.
‘Buoyant’ Demand
“You can see in the Asian market, just walking around Hong Kong, demand for luxury goods is clearly very buoyant,” Rob Edwards, chief metals analyst at Renaissance Capital Ltd., said in an interview in Hong Kong.
Prices of top-quality colorless diamonds climbed 23 percent in 2011, the biggest advance since at least 2006, according to the Rapaport Diamond Trade Index. The index calculates the average price for the top 25 best-quality 1-carat diamonds. It rose 14 percent in 2010.
As impressive as those performance numbers are, they pale in comparison to top quality colored diamonds which have shown consistent on average double figure gains for decades and are primed to rise even further as new demand from China and India continue to put pressure on prices.
The industry’s positive outlook may attract buyers to BHP Billiton Ltd. (BHP)’s Ekati mine in Canada, which the world’s largest mining company said may be offered for sale. The Melbourne-based company agreed to sell its 51 percent ownership in the Chidliak diamond project in Nunavut, Canada, to Peregrine Diamonds Ltd. (PGD), the companies said Dec. 20. “There are lots of companies that would love to have BHP’s diamond assets,” RenCap’s Edwards said. “Some mid-cap, junior would probably pick that up.”
Huge Rare Pink Diamond Found in Australia
by Amy Cooper- AFP – February 22, 2012
Mining giant Rio Tinto said it has unearthed a “remarkable” 12.76 carat pink diamond in Australia, the largest of the rare and previous stones ever found in the resources-rich nation.
Named the Argyle Pink Jubilee, the huge rough stone was found at Rio’s pink diamond operations in the Kimberly region of Western Australia and would take 10 days to cut and polish, the miner said on Wednesday.
“This rare diamond is generating incredible excitement”, said Josephine Johnson from Rio’s Argyle Pink Diamonds division.
“A diamond of this caliber is unprecedented – it has taken 26 years of Argyle production to unearth this stone and we may never see one like this again.
“The individual who gets to wear this remarkable pink diamond will be incredibly lucky indeed.”
Though it would not speculate on how much the Jubilee was worth, Rio said extremely high quality pink diamonds could fetch in excess of US $1 million per carat, meaning it is likely go to for at least $10 million.
Rio produces more than 90 percent of the world’s pink diamonds from the Argyle mine, and said large stones like the Jubilee typically went to museums, were gifted to royalty or end up at prestigious auction houses like Christie’s.
Christie’s had only auctioned 18 polished pink diamonds larger than 10 carats in its 244-year history, Rio added.
Soaring demand for the extremely rare jewel has seen pink diamond prices skyrocket in the past 20 years and they are now among “the most concentrated forms of wealth on earth and well in excess of white diamonds,” Rio said.
The miner describes it as an “elite and discrete” market with buyers including royalty, heads of state, celebrities and “other very wealthy individuals.”
When the Jubilee diamond has been cut and polished it will be graded by international experts and showcased globally in private settings before being sold by invitation-only tender later this year.
It is not known how the diamonds acquire their pink tinge but it is thought to come from a molecular structure distortion as the jewel forms in the earth’s crust or ascends to the surface.
According to local Aboriginal folklore, the Argyle mine was formed when a barramundi fish jumped through the net of three local hunters. The diamonds are its scales glinting in the sun and the pink ones are the fish’s heart.
China To Become Largest Diamond Buyer By 2016
BullionStreet - February 18, 2012
According to Antwerp World Diamond Center, China will overtake the United States to become Antwerp’s biggest destination for diamonds exports by 2016.
Antwerp, the world’s biggest hub for diamond trading, exported a total of 9.28 million carats of both, polished and uncut diamonds to China with a total value of $5.09 billion in 2011.
The Center said the noticeable growth in demand coupled with rising interest in the gemstone as an investment product for Chinese consumers will drive the rise in diamond imports in the country.
China briefly overtook the US to become the world’s biggest diamond consumer in 2008, when the US was caught up in the global financial meltdown, but dropped back to second position when the crisis waned.
The diamond boom has also prompted the Chinese central bank to decide to open up a branch in Antwerp. That may happen within the next six months.
China overtook the U.S. as the world’s biggest auction market for fine art last year, according to research company Artprice. Chinese sales of antiques were alone valued at 6 billion euros ($8.6 billion) and grew 160 percent year-on-year, according to a European Fine Art Foundation report published last month. Further auctions and dealer transactions in the West have turned the trade in Chinese artifacts into a business worth more than $10 billion, according to Bloomberg calculations.
Buying at auctions of Asian art in Europe and the U.S. is now routinely dominated by bidders from China, which last year became the world’s second-biggest economy. The country’s growing number of millionaires is bidding to unprecedented levels to repatriate works of art, particularly when they have Imperial associations.
Colored Diamonds Dazzle Chinese Investors
Jewellery News Asia – Daily – March 19, 2012
Demand for fancy colored diamonds as investment items is on the rise, particularly in China, Reuters reported.
“There are not enough colored diamonds to satisfy one-tenth of the new billionaires that every month are created in China,” Bruno Scarselli, representative of US-based colored diamond specialist Scarselli Diamonds, was quoted as saying.
Scarselli said that natural colored diamonds constitute less than 1 percent of global diamond production, which gives them “unquestionable value”. He also noted that there’s currently a huge demand for yellow diamonds, as well as blue and pink.
Scarselli further said that he expects financial institutions to be increasingly drawn to investing in diamonds.
“This is associated with the fact that currency is losing its value, government bonds are a risk, and nations are losing wealth,” he said.
According to Simon Zion of Hong Kong-based diamond company Dehres Ltd., blue diamonds are the rarest. These gems are highly sought after because of their beauty and rarity.
This report is based on information available to the public. The information and any statistical data contained herein have been obtained from sources which we believe to be reliable, but we do not represent that they are accurate or complete and should not be relied upon as such. The material contained herein is for information purposes.
Premier Diamond Group (North America) Lt
David Metcalfe
416-679-9306
info@premierdiamondltd.com
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