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And while in Belgium significant delays are occurring due to sanctions and regulatory obstacles, connected with economic policies of the G7, in Israel traders are seeing fluctuating import levels, further highlighting the market’s volatility. Golan highlights that each market is affected by both external forces such as economic policies and geopolitical events, and by internal forces within the diamond industry. These factors create a complex and variegated panorama. One of the critical areas on which Golan’s presentation is focused is inventory management, referring to data of Martin Rapaport reports, which show significant changes in the inventory levels in the different markets.
Stock levels in India have increased by 150% since January, for smaller and certified diamonds.
This increase is contrasted by a fall in the stocks of larger diamonds in other centres such as Belgium and Israel. This accumulation of stock suggests a strategic position to satisfy future demand, but also indicates the potential risks if the
demand does not materialise as expected. The discrepancy in the levels of stocks between
the markets highlights the need for an attentive management and specific market strategies.
An important change discussed by Golan is the transition from a push market to a pull market.
In the past, diamond producers and dealers “pushed” the goods onto the market, often leading to financial inefficiencies and tensions due to the elevated financing costs. Nevertheless, the market has now shifted to a “pull” model, in which consumer demand guides production and distribution.
In this driving market, consumer preferences and purchasing behaviour play a crucial role.
Golan provides an overview of the current demand for jewellery with natural diamonds, which amounts to a global figure of approx. 85 billion dollars. Nevertheless, this figure
is a slight drop compared
to previous years.
The United States remain the largest market, though having also recorded fluctuations in demand.
China, once important driver of growth, has recorded a fall in demand, while the Indian market shows signs of growth, even if at a potentially inflated rate, as reported by local sources such as Tata Group. The economic conditions in the key markets such as the United States and China are crucial determining factors of diamond demand.
In the United States of America, despite a strong economy, consumer sentiment is affected by political uncertainty and social trends, which lead to cautious spending.
On the contrary, the economic challenges of China and the change in consumer behaviour affect demand dynamics. Furthermore, the introduction and acceptance of lab-grown diamonds account for about 15% of the diamond market in the United States, primarily due to their lower price and ethical allure. This market penetration is an opportunity and challenge for the sector: while the overall dimension of the market expands, it also cannibalises the demand for natural diamonds.
Golan underlines that the increase in lab-grown diamonds is slowing down but, in any case, continues to occupy a substantial part of the market.
The industry must address this change by tackling consumer preference and differentiating the value proposition of natural diamonds. Edahn Golan’s intuitions underline the complex nature and the continuous evolution of the diamond industry.
From the fall in production and market segmentation
to the increase in lab-grown diamonds and the change in consumer behaviour,
the industry must address multiple challenges. Nevertheless, these challenges also present the opportunity for innovation and strategic realignment. For the interested parties of the sector, the essential point is the importance of understanding and adapting to market dynamics. Concentrating on consumer demand, strategic stock management and overcoming economic uncertainties, the diamond industry can position
itself to achieve sustainable growth over the years
to come.