Diamond Gems Weekly - September 2.
Is it just me or does September feel like the beginning of the end of the year? Perhaps it’s due to the change of season; it’s suddenly cooler than it was a week ago – which was sooo August 2024!
But as the weather cools (in the northern hemisphere), will the diamond market warm up in the final stretch?
September is an important month as jewelers prepare for the important holiday selling period. That should stimulate diamond trading and help dealers and manufacturers reduce their inventory, which has been bloated for most of this year.
The reduction of rough supply, with De Beers canceling its August sale, and Alrosa reportedly doing the same, should help. Already, we’re hearing reports of long lines to get into the Dubai Diamond Exchange where multiple rough tenders took place last week.
No doubt, the new month brings with it a sense of opportunity and optimism; let’s see what the headlines have to say…
>>> September 1 marked the transition into the next phase of G7 sanctions on Russian diamonds. The restrictions have been extended to 0.50 carats and above, whereas before it was limited to 1-carat and larger. Currently, the rules require importers to make declarations about their supply, while the EU is working on a blockchain / traceability-based system to be implemented in March. The US is reportedly still considering the same. De Beers said it is ready for this latest phase of import requirements.
>>> Rough production, meanwhile, continues to decline, having sunk to historic lows in 2023. The drop in diamond recoveries is a response to market conditions but also a reflection of diminishing prospects for viable new mines. In my latest piece for Rapaport, I explore whether and why we’re Past Peak Production.
>>> While we’re talking about production, you remember the 2,492-carat rough diamond recovered at the Karowe mine in Botswana, right? How could you forget it? Check out my latest video exploring some of the factors to consider about the stone: Lucara Diamond & the Race to 3,000 Carats.
>>> The Meya Mine, a lesser-known operation located in Sierra Leone’s Kono district, yielded a 391.45-carat, “super-deep” type IIa diamond. The mine also produced the 523.44-carat Prosperity Diamond in 2017. The latest find is said to have been part of a larger stone weighing 514.99 carats that was broken into three pieces, the National Minerals Agency reported.
>>> Gem Diamonds is no stranger to such exceptional stones. It unveiled a 129.71-carat, type II white diamond unearthed at its Letšeng mine in Lesotho. It also reported that group revenue grew 9% to $78 million in the first half of the year, while profit more than tripled to $5.5 million. Gem Diamonds raised its production and sales guidance for the year due to its improved operational performance.
>>> Let’s turn to retail, shall we... Chow Sang Sang reported sales fell 13% to HKD 11.05 billion ($1.4 billion) in the first half of 2024, while profit slumped 37% to HKD 519.8 million ($66.7 million). Declines were recorded in both mainland China and Hong Kong-Macau. Gem-set jewelry was its worst performer, down 42%, largely due to a downtrend in demand for diamond jewelry.
>>> Recent results in China provide a constant reminder as to why we need stronger marketing activity. De Beers has made its promises, partnering with major retailers to improve sales-staff messaging about natural diamonds, and for joint marketing campaigns. It is collaborating with Signet Jewelers in the US and Chow Tai Fook in China. But its latest tie-up with Tanishq in India may be its most important yet, given India is the fastest growing market for diamond jewelry.
Image: Julius Daniel Mattai, Sierra Leone’s Minister of Mines and Mineral Resources. (Credit: National Minerals Agency).
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