Recovery is underway, but it will be slow – this is the principal message of the 2009 Antwerp Diamond Symposium that came to its end yesterday in Antwerp, Belgium.
The Symposium was the last in a line of conferences organized by the World Diamond Centre (AWDC) with a view to analyze the state of the global diamond industry and to discuss its prospects.
The subject to discuss at the Symposium this year was "Diamond Industry under New Economic Conditions". Key branch experts and representatives of the related industrial sectors took part in the discussion. They exchanged views on the state of the business and markets in the initial period of global economy recovery after the global financial and economic crisis.
As stated in the summary of the forum, after one of the most difficult years the diamond industry has ever known, 2010 is likely to be a year of growth.
According to AWDC CEO Freddy J. Hanard, if the participants of the diamond market act proactively they will succeed. In this context, the Symposium has further contributed to the insight into how they can go forward under the conditions changed by the global financial and economic crisis.
"I do not doubt that the different messages carried out through this symposium, will be put into practice in coming months", Hanard said.
Despite the very difficult conditions experienced by the industry over the past 18 months, the number of business failures that occurred over the period did not exceed the rate expected in a non-recession year, symposium participants declared.
The stability was the result of the policies of the diamond mining companies which cut production and suspended sales during the first part of the year, and the banks which maintained the general level of credit they extend to the diamond industry.
General concern was expressed by the participants of the 2009 Antwerp Diamond Symposium at the 30 percent increase in the price of rough diamonds that has been witnessed over the past six months, during a period in which no corresponding increase has been reported in the average price of polished diamonds. To maintain its recovery, the Symposium participants were warned by speakers, it is important not to create another speculative price bubble.
Chaim Even-Zohar, Managing Director of Tacy Ltd Consultants, forecast that in 2010 the retail diamond market would post a 0.4 percent rise as compared to the level of 2008, and a 25 percent increase in polished sales in cutting centres.
According to Even-Zohar, by the results of 2009 the growth of the retail diamond sales will be 9.5% lower than the last year indicator. Decrease in polished sales will be 27%, and that in rough diamonds will be 48%.
In turn, economist Pranay Naverkar, a representative of Rosyblue, expressed his opinion that there was a need in financial resources by the end of 2010, when the business showed the rise.
Speaking before the Symposium participants, Pluczenik CEO, Chaim Pluczenik, on his part, warned that the diamond industry "is not at the end of the tunnel" on its way to recovery. At the same time, he informed that in 2010 "business will have much more liquidity".
Chris Ryder, Marketing Director of BHP Billiton, emphasized that back-log of needs for diamond raw material supplies would become a great problem for the industry.
Representatives of the banks and the mining companies who addressed the symposium expressed their continued support for the industry. ALROSA Vice President Sergei Ulin earned the warm applause of the symposium audience when he declared that, despite the difficult economic circumstances, the company had no intention of flooding the market with rough diamonds in effort to turn a quick profit.
"First of all, I assured that the company would proceed with the responsible policy not only in the interests of ALROSA, but also for the sake of stability at the global rough and polished diamond market," Sergei Ulin said to Rough&Polished.
In replying to the question on what was his estimate of the diamond market prospects, ALROSA Vice President expressed his opinion that the revival would be "long enough in time and undergo various stages".
"In my view, another speculative price bubble is being created now, but I think the experience we have allows clever use by us of the gained income and prepare to difficult periods beforehand," Ulin said.
He believes that the global diamond industry will come out of the crisis with a new business structure and with a new balance of forces.
"And this is another and more important task with a long-term prospect for ALROSA and the entire Russian diamond business," stated the Vice President of the Russian diamond company.
The next speaker, Tim Dabson, De Beers, Executive Director for Benefication, reported that in the nearest decade the company expected further growth of demand for polished diamonds in India and China, where they were considered as signs of love.
On his part, Patrick Coppens, Marketing Manager, advised that, according to the forecast of his company, improvement in the diamond industry would be gradual, and "that is why we are cautiously optimistic" with regard to the estimate of the nearest prospect; however, in the long-term perspective it is "extremely positive".
Alex Shishlo, Editor of the Rough&Polished European Bureau in Brussels
