Diamond Demand Could Cause Prices to Go Up By a Third

May 23, 2005

Diamond Demand Could Cause Prices to Go Up By a Third

Diamond demand could rise by at least 50% by 2012, to $14 billion. The Sunday Times of London reported diamond industry analyst James Picton, WH Ireland, was slated to give that warning to an international diamond conference on May 23 at the London stockbroker Hargrave Hale. Picton also said the market could face a $3 billion supply shortage by the same year.

As a result, prices for rough diamonds will go up by at least 30%, predicted Picton. "You have supply going up by 1% a year on average, and demand going up by at least 5% a year." But Picton said that was a conservative estimate and the real increase in demand could be much higher. "There are going to be other mines coming on stream, but nothing like another $3 billion worth. That's almost another De Beers. It's just not going to happen," he said.

Demand is being driven by industrial and commercial markets, while there had been a massive new increase in demand for gemstones in China and India, Picton said.

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