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Class Editori News

Asia and Millennial consumers hauling the synthetic diamonds market

August 02, 2019


Abstract : Younger generations are in for the sustainability plus convenience combo even in the high-end market. Focus is on ethic issues, in particular the working conditions of miners and the environmental print of extractions.

MILAN, Aug 1 (Class Editori) – The world of luxury – and, logically, that of diamonds – is changing, pushed by Asian markets and by the needs of younger generations. The trend has been running since a few years already, yet the current predictions seem to attest a general speed-up of the process. As a matter of fact, according to an analysis of Kenneth Research, the synthetic, lab-made diamonds segment should achieve a 27.6-billion business (around 24.7 billion euros) by 2023. It makes for a good acceleration, in particular since the same business attested at 16.2 billion (14.5 billion euro) just in 2015.

Within the next four year, annual growth should peak at 7.4 percent. The analyst Paul Zimnisky believes that, during the same period, the use of synthetics diamonds in jewelry should shift from current 3.5 percent to 6 percent – and could even achieve 10 percent by 2030, at least according to Citybank's calculations.

Several factors should concur in producing these results. First of all, just 5 years ago the difference in price between synthetic and natural was of about 10 percent, while it has already reached a 50 percent gap as of today – and may even become of 90 percent in another 5 years. Second, the Asia-Pacific region is first in the world in terms of number of production laboratories, thus gathering 51.2 percent of global revenues – and keeps growing in this sense.

Leading the race is China, applying advanced technologies in its production processes, and becoming one of the biggest threats for diamond miners everywhere around the world. A quick increase in infrastructural services is underway in the Middle East and in Africa as well, while Europe should be growing at a much slower rate.

Synthetic diamonds are shining among Millennial buyers, as the new generations are in for the sustainability plus convenience combo even in the high-end market. After all, their focus is on ethic issues, in particular the working conditions of miners and the environmental print of extractions.

Meanwhile, the De Beers Group giant closed the first quarter of 2019 with total revenues down 17 percent, touching 2.6 billion dollars (2.3 billion euros); rough diamonds sales falling by 21 percent and reaching 2.3 billion (2 billion euros); and a -13 percent in terms of volumes, accounting for 15.5 million karats.

Global demand is accusing the blow of the stock market's volatility, of the ongoing commercial dispute between the US – still the best player in the sector – and China, and of the strengthening of the dollar. According to CEO bruce Cleaver, the diamonds market is going through a crisis similar to that of 2014-15, when raw materials prices fell hard. Yet, US demand should start growing again in the second half of 2019. The group has just invested 468 million dollars (around 420 million euros) for a new extractor ship, which should become operative offshore from the Namibian coast.

(Source:Class Editori)

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Keyword: diamonds-market consumers growth

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