Marcel Zalc, a famous Belgian diamantaire having over 35 years in diamond trading under his belt, shared his vision of the state of and prospects for the global diamond market with the Rough&Polished correspondent in Brussels.
It is noteworthy that Mr. Zalc was one of the diamantaires, who addressed a complaint to the European Commission in early 2000 regarding De Beers, which, in their opinion, occupied a dominant position in the diamond market in Antwerp and thus violated the EU legislation on free competition.
What is your opinion of the way the global diamond market is currently functioning? What are the trends that you see as encouraging and what is causing your concern?
The world diamond market is in the process of mutation, and, like all other industries, it is driven by globalization and the need for consolidation, which gives an advantage to large companies, while small and medium ones cannot be a part of this trend for financial reasons or lack of supply sources. This trend has forced a large number of players in the market to give up their business.
The luxury market is generally doing well. Diamonds are in demand, but they are mainly in the niche of high-quality products that are more difficult to find, because the demand is focused on one type of goods - diamonds of excellent quality, VS, and the first five colors.
Which one of the world diamond trading centers, in your opinion, is the most promising? What is your forecast for the future?
India now accounts for a very large part of trading in precious stones having the advantage of excessive and cheap labor. None of the initial manufacturing centers had this advantage. It is for this reason that the number of diamond cutters in Antwerp shrank to the size of a "brooklet" despite the fact that there is a large number of diamond cutting specialists in this city and a number of diamond cutting workshops. On the other hand, Indian traders monopolized the process of cutting the majority of small diamonds. This involves thousands of cutters who work for low wages, and it gives Indian companies an edge, thanks to which no other country can compete with India. In addition, India’s emerging economy with its consumer potential makes this country inevitable in terms of trade in finished goods. Thus, India aligns its course to maintain continuous operation of this industry.
Do you think the current prices for polished goods are fair?
Today, the market offers a wide range of quality products, including jewelry, and this results in very different prices. But it is clear that during the crisis public demand is mostly after small-size goods and trading is going on in this segment.
Are you satisfied with the way the Kimberley Process is performing its functions? How effective is this organization?
The Kimberley Process has gained unanimous support from the industry. It seems to provide much greater transparency with regard to the origin of stones and how mines are being run.
Do you think that natural diamonds will be replaced by synthetic stones?
Synthetic stones were at all times, but the magic of diamonds remains complete and the consumer, of course, understands the value of one relative to another. Both products have their place in the creation of jewelry, but they are not equivalent. I believe that natural diamonds fully retain their appeal due to the fact that they can be viewed as an investment vehicle, while the value of synthetic stones leaves many asking questions.
What would you like to wish to jewelers for the New Year?
If they have a name, which they value, and if they are known to be reliable traders, they should not sink into pessimism offering "budget" goods, which often have nothing to do with what was sold in the store before, but instead try to make bet on goods, which can become attractive in the current situation. Being versatile in their creativity allows jewelers to juggle with both models and prices. The main thing for a trader is to preserve reputation, so that the customer when he or she happens to thinks about "jewelry and quality" comes to this trader.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
