When the Federal Reserve Bank of the United States wants to slow down economic growth, it raises interest rates. When he wants to stimulate economic growth, he lowers interest rates. This is the application of the law of supply and demand. It works in the same way in the retail markets: when the price increases, consumer demand weakens; When the prices in shops fall, usually crowds of buyers.
For many years, jewelers use price-based marketing: signboards "50% discount" usually decorate the showcases of their stores, luring buyers who went in search of profitable purchases.
But recently these signs "50% discount" were replaced by the signs "discounts up to 70%", but there is no increase in the flow of customers. In fact, retail prices for jewelry have been falling since the end of 2013; At the same time, demand continues to weaken. Worse still, our example with jewelery merchants suggests that there is no end to this: a decrease in the number of customers and a decrease in average checks for purchases hurt the sales volume in the industry.
Questions of the "general situation"
What's going on? We all heard the explanation of the "general situation". First, people born during the post-war demographic explosion - more mature, healthy consumers - do not buy jewelry to the same extent as previous generations. Secondly, people of the third millennium - a young, mostly healthy demographic group of the population - postpone marriage at a later date. Even when they marry or get married, they do not buy a traditional diamond engagement ring, often preferring something more modern and less expensive. In addition, representatives of the third millennium generation do not want "things", they want "sensations and adventures." A study conducted by De Beers showed that the tourism industry,
Two major obstacles to increasing the price of jewelry
The main reason that jewelers lost their power in the formation of prices - the ability to raise prices - is that they also lost confidence in their prices. Signs of retailers "50% discount" every day do not find a response from buyers who see the same advertisement day after day in the shopping complex. When buyers do not know how much they have to pay for a piece of jewelry, they do not buy it, often because of skepticism, fear and mistrust of the retailer. We call this "price roulette", and traders always lose the game. Secondly, most of the jewelry is not branded, so buyers do not really know anything about the quality of these products, especially in the market where the goods are discretionary,
Diamond dealers can not understand.
We noticed that, faced with a decline in consumer demand, the diamond industry requires a price increase for diamonds. This is absolutely contrary to the laws of supply and demand. Prices for diamonds reached a peak in mid-2011, and since then began to decline. Trying to raise prices, dealers with diamonds, it seems, can lose that small number of buyers who are still on the market.
Forecast: times change
Retailers of jewelry and their suppliers need to rethink their marketing and product strategy. They should ask the question: "How can I attract the attention of childless families with both working spouses of the third millennium"? The purchase of a jewelry should be an "event".
There are many marketing consultants who know that the diamond and jewelry industry must do to survive and develop. The problem is that the jewelry industry is basically rooted in the 19th century, and traders do not seem to want to admit that the market has changed. Merchants must reach consumers of the 21st century and meet the current needs of new customers, such as they are now, and not the needs of people who lived several generations ago. In our opinion, they need help from the outside.
http://www.idexonline.com/Memo?Id=40731
Thursday, August 3, 2017
Philippe Mellier, CEO of De Beers, said that the diamond industry has a very favorable global medium and long-term outlook, and the United States market will play a central role in the bright future of the industry.
"... our data show that in 2014, global demand for diamond jewelry reached a new record of $ 81 billion. This confirms that the diamond dream is still very much alive and, with concern about the possible impact of the Great Depression on the behavior of diamond buyers, it's nice to see that last year consumers spent more on diamond jewelry than ever before, "He said in his speech last Friday at the 2015 JCK Las Vegas Show in Las Vegas.
"At the same time, these data also outline the continuing global growth. The growing demand for diamond jewelry was not a cultural phenomenon that is characteristic of a limited part of the world - it speaks about the worldwide attractiveness of diamonds and the ability of the industry to make maximum use of sources of demand wherever they are located, "said Melier.
In 2014, the positive growth in demand for diamonds in terms of local currency was achieved in each of the five major consumer markets, which together represent about 75 percent of global demand.
"And again, this is an excellent achievement, as it shows how it is possible to support the worldwide desire of consumers to have diamonds in a global economy that has been - and still is - fragile, even if it is being restored," said Mélier. "It is also impressive that growth continued in places with different levels of maturity and different consumer preferences."
He said that the industry is in the economic cycle of development, the picture of the past years with respect to diamonds continues to be observed, when the influence on consumers' desires has been increasingly affected, and the demand for diamonds has increased significantly in the past few years.
"So, the global picture in recent years has been positive. But, of course, today we are showing special interest in how the United States looks in this world picture, "said the head of De Beers.
"So, returning specifically to the United States, there are several reasons for satisfying the way things are developing. In my opinion, many were surprised that the United States, despite the fact that they undoubtedly are the largest and most mature consumer market, said last year about the largest growth of 7 percent on an annualized basis, "he said.
Mellier noted that in terms of the global share of demand from that country, a steady performance in 2014 also meant that the United States is now returning to its pre-crisis share of demand for diamonds.
"Maybe there are several" novice consumers "as to the demand for diamonds in the world, but it seems that no one understands the brilliance of diamonds as an American consumer," he said. "And although the stable economy of the United States has clearly helped increase demand in retailing in recent years, in 2014 there were some particularly positive signs for jewelry."
Reasons for confidence
Mellier said that there are solid grounds for optimism, given the prospects for global demand for diamonds.
He said some time ago that the increase in demand for diamonds in the US is closely related to GDP growth.
Forecasts indicate a strong growth in the United States GDP for this period, and the data also show a significant increase in private consumption in the US, as well as a confident growth in personal disposable income.
"In addition, since 2009, the share of diamonds in the amount of consumer spending in the United States has increased, and growth is projected to continue. So, the macroeconomic indicators clearly indicate a great future potential, "said Meglier.
"It is also interesting to consider the forecast of growth in the base of wealthy US consumers in future years. It is expected that wealthy consumers will become the driving force for the growth of diamond jewelry demand in the US, and the number of American families with an annual income of more than $ 100,000 is believed to increase - the cumulative annual growth rate of demand by 2019 will reach almost 5 percent, "he stressed.
http://rough-polished.com/ru/expertise/97254.html
"... our data show that in 2014, global demand for diamond jewelry reached a new record of $ 81 billion. This confirms that the diamond dream is still very much alive and, with concern about the possible impact of the Great Depression on the behavior of diamond buyers, it's nice to see that last year consumers spent more on diamond jewelry than ever before, "He said in his speech last Friday at the 2015 JCK Las Vegas Show in Las Vegas.
"At the same time, these data also outline the continuing global growth. The growing demand for diamond jewelry was not a cultural phenomenon that is characteristic of a limited part of the world - it speaks about the worldwide attractiveness of diamonds and the ability of the industry to make maximum use of sources of demand wherever they are located, "said Melier.
In 2014, the positive growth in demand for diamonds in terms of local currency was achieved in each of the five major consumer markets, which together represent about 75 percent of global demand.
"And again, this is an excellent achievement, as it shows how it is possible to support the worldwide desire of consumers to have diamonds in a global economy that has been - and still is - fragile, even if it is being restored," said Mélier. "It is also impressive that growth continued in places with different levels of maturity and different consumer preferences."
He said that the industry is in the economic cycle of development, the picture of the past years with respect to diamonds continues to be observed, when the influence on consumers' desires has been increasingly affected, and the demand for diamonds has increased significantly in the past few years.
"So, the global picture in recent years has been positive. But, of course, today we are showing special interest in how the United States looks in this world picture, "said the head of De Beers.
"So, returning specifically to the United States, there are several reasons for satisfying the way things are developing. In my opinion, many were surprised that the United States, despite the fact that they undoubtedly are the largest and most mature consumer market, said last year about the largest growth of 7 percent on an annualized basis, "he said.
Mellier noted that in terms of the global share of demand from that country, a steady performance in 2014 also meant that the United States is now returning to its pre-crisis share of demand for diamonds.
"Maybe there are several" novice consumers "as to the demand for diamonds in the world, but it seems that no one understands the brilliance of diamonds as an American consumer," he said. "And although the stable economy of the United States has clearly helped increase demand in retailing in recent years, in 2014 there were some particularly positive signs for jewelry."
Reasons for confidence
Mellier said that there are solid grounds for optimism, given the prospects for global demand for diamonds.
He said some time ago that the increase in demand for diamonds in the US is closely related to GDP growth.
Forecasts indicate a strong growth in the United States GDP for this period, and the data also show a significant increase in private consumption in the US, as well as a confident growth in personal disposable income.
"In addition, since 2009, the share of diamonds in the amount of consumer spending in the United States has increased, and growth is projected to continue. So, the macroeconomic indicators clearly indicate a great future potential, "said Meglier.
"It is also interesting to consider the forecast of growth in the base of wealthy US consumers in future years. It is expected that wealthy consumers will become the driving force for the growth of diamond jewelry demand in the US, and the number of American families with an annual income of more than $ 100,000 is believed to increase - the cumulative annual growth rate of demand by 2019 will reach almost 5 percent, "he stressed.
http://rough-polished.com/ru/expertise/97254.html
If you look at brands that target young people, they do it through Social media and digital advertising
Everyone agrees that the diamond industry should more engage in type marketing in the style of the legendary De Beers campaigns that created this industry. So the news about the establishment of the Diamond Producers Association (DPA), the largest diamond miners, was met with warmth.
However, as we said before, this organization will not be a new De Beers.
First of all, it starts its activity with a budget of $ 6 million. "To anyone who thinks he can carry out marketing in kind, having a budget of $ 6 million, I wish success," said Jim Pounds, president of Dominion Diamond Corp.
Nevertheless, this may be enough for the start, says Jean-Marc Lieberherr, head of Rio Tinto Diamonds.
"We are not going to go back to the $ 200 million budget for television advertising," he says, "the young people we're targeting do not even watch TV." If you look at brands that target young people, they do it through Social media and digital advertising. "
The association can also look for partners already along the way.
"We have campaigns that are compelling and contribute to the creation of value added, so if others want to contribute, we will make it possible," says Lieberher.
At the moment, the priority of the association is to find an executive director who will carry out his mandate. This mandate includes an increase in consumer demand and the strengthening of confidence in diamonds, as well as sectoral research and sharing of best practices in the field of health and safety.
Almost all of the seven producers who joined this work have some historical connection with De Beers. And, as we know, not all producers of diamonds are alike: some of them have been the subject of controversy, including accusations of human rights violations. But the organizers say that any manufacturer that joins their group must meet certain criteria.
"There are clear criteria for areas of responsibility, - said Stiven Luse (Stephen Lussier), executive vice president of marketing for De Beers company -. We need it, if the association is going to speak on the reputation."
At the present time, most organizers say that the creation of the association is long overdue.
"We are one of the few primary sectors that do not have a producer association," says Lieberher, "The producers of tin, nickel and even milk have associations." We are in the role of catch-up. "Due to the structure of industry and the former role of De Beers The industry has not yet matured, we are becoming a more normal industry, and the fact that this association is now being formed is a sign of maturity. "The ability to speak with one voice is important, and this is something that we did not have before."
http://www.jckonline.com/blogs/cutting-remarks/2015/06/02/new-diamond-group-wont-be-what-you-think?utm_source=JCK%20eNewsletters&utm_campaign=caf4cf3c60-2015_06_02_New_Product_Tuesday&utm_medium=email&utm_term=0_56301e74d4-caf4cf3c60-334044809
However, as we said before, this organization will not be a new De Beers.
First of all, it starts its activity with a budget of $ 6 million. "To anyone who thinks he can carry out marketing in kind, having a budget of $ 6 million, I wish success," said Jim Pounds, president of Dominion Diamond Corp.
Nevertheless, this may be enough for the start, says Jean-Marc Lieberherr, head of Rio Tinto Diamonds.
"We are not going to go back to the $ 200 million budget for television advertising," he says, "the young people we're targeting do not even watch TV." If you look at brands that target young people, they do it through Social media and digital advertising. "
The association can also look for partners already along the way.
"We have campaigns that are compelling and contribute to the creation of value added, so if others want to contribute, we will make it possible," says Lieberher.
At the moment, the priority of the association is to find an executive director who will carry out his mandate. This mandate includes an increase in consumer demand and the strengthening of confidence in diamonds, as well as sectoral research and sharing of best practices in the field of health and safety.
Almost all of the seven producers who joined this work have some historical connection with De Beers. And, as we know, not all producers of diamonds are alike: some of them have been the subject of controversy, including accusations of human rights violations. But the organizers say that any manufacturer that joins their group must meet certain criteria.
"There are clear criteria for areas of responsibility, - said Stiven Luse (Stephen Lussier), executive vice president of marketing for De Beers company -. We need it, if the association is going to speak on the reputation."
At the present time, most organizers say that the creation of the association is long overdue.
"We are one of the few primary sectors that do not have a producer association," says Lieberher, "The producers of tin, nickel and even milk have associations." We are in the role of catch-up. "Due to the structure of industry and the former role of De Beers The industry has not yet matured, we are becoming a more normal industry, and the fact that this association is now being formed is a sign of maturity. "The ability to speak with one voice is important, and this is something that we did not have before."
http://www.jckonline.com/blogs/cutting-remarks/2015/06/02/new-diamond-group-wont-be-what-you-think?utm_source=JCK%20eNewsletters&utm_campaign=caf4cf3c60-2015_06_02_New_Product_Tuesday&utm_medium=email&utm_term=0_56301e74d4-caf4cf3c60-334044809
The use of diamonds in machining is limited to colored materials
The aerospace industry uses a wide range of materials due to its characteristics, such as strength, density and stiffness.
Examples of such materials are nickel based superalloys and composites. But they are difficult to cut, and special methods of machining are required. As a result, diamonds are used wherever conventional tools can not be used to achieve the ultimate goal of the production process.
Use of diamonds to increase tool life and improve cutting conditions
The success of the use of diamond tools in the aerospace industry is mainly due to the properties that this material possesses and which lead to an increase in the service life of the tool and improvement of the cutting regimes in comparison with conventional materials.
Diamond has the highest value of hardness of minerals on the Mohs scale (Mohs). This scale allows you to classify the resistance of the material to the appearance of scratches and has a range from 1 (the softest) to 10 (the hardest).
The diamond has a hardness of 10 on the Mohs scale, which corresponds to a hardness four times higher than that of corundum (Al2O3), which is 9 on the Mohs scale.
Diamond tools can be created using different materials depending on the application and the requirements for the product. Diamonds can be divided into natural or synthetic. Materials from synthetic diamonds can be divided into different classes: grains and powders, PCD (polycrystalline diamonds) and diamonds obtained by CVD (chemical vapor deposition).
Grains from synthetic diamonds
Fine grains of diamonds and synthetic diamond powders (abrasives) are used as abrasive materials by binding them to the surface of the tool. This can be achieved in various ways, depending on the required technological characteristics, for example, the tool rotation speed.
Diamond particles can be deposited on the surface of the tool either by electrolytic deposition using a nickel solution or by sintering using a tungsten matrix. Another method, known as high-temperature brazing, is that diamond particles are soldered onto the metal surface of the tool.
Each of these bonding methods has the corresponding advantages and disadvantages associated with the time required to produce the tools and the ability of the binder to retain the diamond particles depending on the final performance.
Instruments using PCD (polycrystalline diamond)
In tools using PCD (or polycrystalline diamond inserts), diamond segments are connected, usually by high-temperature soldering, to a carbide substrate. PCD elements are produced by sintering micron powders of synthetic diamonds to adhere particles to a process characterized by high temperature and pressure.
This material is produced using cemented carbide firing, which provides the desired source of metal, usually cobalt, for the sintering process. During the manufacturing process, the metal from the carbide carbide substrate penetrates between the grains of the diamond, ensuring their adhesion.
The content of metals in tools with PCD provides the material with electrical conductivity, allowing the use of such a machining process as cutting on EDM (EDM) for cutting diamond elements.
Instruments using synthetic CVD diamonds
Another type of synthetic diamond is produced using a technique known as chemical vapor deposition (CVD). Diamonds obtained with CVD are deposited as thin layers on the surface of the tool during the process, with careful monitoring of the growth conditions.
One of the main advantages when using this type of synthetic diamond is the possibility of obtaining additional geometric dimensions and cutting edges, using a material characterized by highly predictable properties.
The use of diamonds in aerospace manufacturing processes
At present, diamonds are used in a number of manufacturing processes in aerospace engineering, mainly because of their high wear resistance and the ability to machine materials that are difficult to cut. As already mentioned, diamonds can be produced in various ways, obtaining a number of products with characteristics specially specified for the end use of tools. They can be used in processes that use tools with geometric parameters of the cutting edge (turning, milling and drilling) and not geometric parameters (grinding and finishing).
The use of diamonds in machining is limited to colored materials. Diamond is characterized by its great affinity with iron and nickel, especially at high temperatures. Particular attention must be paid at the maximum process temperature to avoid the transformation of diamond into graphite due to the unstable nature of this material.
In particular, at low pressures, the diamond surface was graphitized at a temperature below 1700 ° C; The conversion temperature can be reduced to 400 ° C if iron components are present.
As a result, carbide tools are currently used in the machining of titanium alloys, nickel alloys and stainless steel using tools with geometric parameters of the cutting edge. Conversely, in the case of abrasive processes, materials such as CBN (cubic boron nitride), aluminum oxide and SiC (silicon carbide) are used for machining steel, nickel alloys, ceramics and titanium alloys.
Another alternative to diamond in the machining of materials from ferrous metals is PCBN (polycrystalline cubic boron nitride), a composite material produced by sintering CBN powder of micron fractions with various types of ceramics.
http://www.azom.com/article.aspx?ArticleID=11948
Examples of such materials are nickel based superalloys and composites. But they are difficult to cut, and special methods of machining are required. As a result, diamonds are used wherever conventional tools can not be used to achieve the ultimate goal of the production process.
Use of diamonds to increase tool life and improve cutting conditions
The success of the use of diamond tools in the aerospace industry is mainly due to the properties that this material possesses and which lead to an increase in the service life of the tool and improvement of the cutting regimes in comparison with conventional materials.
Diamond has the highest value of hardness of minerals on the Mohs scale (Mohs). This scale allows you to classify the resistance of the material to the appearance of scratches and has a range from 1 (the softest) to 10 (the hardest).
The diamond has a hardness of 10 on the Mohs scale, which corresponds to a hardness four times higher than that of corundum (Al2O3), which is 9 on the Mohs scale.
Diamond tools can be created using different materials depending on the application and the requirements for the product. Diamonds can be divided into natural or synthetic. Materials from synthetic diamonds can be divided into different classes: grains and powders, PCD (polycrystalline diamonds) and diamonds obtained by CVD (chemical vapor deposition).
Grains from synthetic diamonds
Fine grains of diamonds and synthetic diamond powders (abrasives) are used as abrasive materials by binding them to the surface of the tool. This can be achieved in various ways, depending on the required technological characteristics, for example, the tool rotation speed.
Diamond particles can be deposited on the surface of the tool either by electrolytic deposition using a nickel solution or by sintering using a tungsten matrix. Another method, known as high-temperature brazing, is that diamond particles are soldered onto the metal surface of the tool.
Each of these bonding methods has the corresponding advantages and disadvantages associated with the time required to produce the tools and the ability of the binder to retain the diamond particles depending on the final performance.
Instruments using PCD (polycrystalline diamond)
In tools using PCD (or polycrystalline diamond inserts), diamond segments are connected, usually by high-temperature soldering, to a carbide substrate. PCD elements are produced by sintering micron powders of synthetic diamonds to adhere particles to a process characterized by high temperature and pressure.
This material is produced using cemented carbide firing, which provides the desired source of metal, usually cobalt, for the sintering process. During the manufacturing process, the metal from the carbide carbide substrate penetrates between the grains of the diamond, ensuring their adhesion.
The content of metals in tools with PCD provides the material with electrical conductivity, allowing the use of such a machining process as cutting on EDM (EDM) for cutting diamond elements.
Instruments using synthetic CVD diamonds
Another type of synthetic diamond is produced using a technique known as chemical vapor deposition (CVD). Diamonds obtained with CVD are deposited as thin layers on the surface of the tool during the process, with careful monitoring of the growth conditions.
One of the main advantages when using this type of synthetic diamond is the possibility of obtaining additional geometric dimensions and cutting edges, using a material characterized by highly predictable properties.
The use of diamonds in aerospace manufacturing processes
At present, diamonds are used in a number of manufacturing processes in aerospace engineering, mainly because of their high wear resistance and the ability to machine materials that are difficult to cut. As already mentioned, diamonds can be produced in various ways, obtaining a number of products with characteristics specially specified for the end use of tools. They can be used in processes that use tools with geometric parameters of the cutting edge (turning, milling and drilling) and not geometric parameters (grinding and finishing).
The use of diamonds in machining is limited to colored materials. Diamond is characterized by its great affinity with iron and nickel, especially at high temperatures. Particular attention must be paid at the maximum process temperature to avoid the transformation of diamond into graphite due to the unstable nature of this material.
In particular, at low pressures, the diamond surface was graphitized at a temperature below 1700 ° C; The conversion temperature can be reduced to 400 ° C if iron components are present.
As a result, carbide tools are currently used in the machining of titanium alloys, nickel alloys and stainless steel using tools with geometric parameters of the cutting edge. Conversely, in the case of abrasive processes, materials such as CBN (cubic boron nitride), aluminum oxide and SiC (silicon carbide) are used for machining steel, nickel alloys, ceramics and titanium alloys.
Another alternative to diamond in the machining of materials from ferrous metals is PCBN (polycrystalline cubic boron nitride), a composite material produced by sintering CBN powder of micron fractions with various types of ceramics.
http://www.azom.com/article.aspx?ArticleID=11948
Diamond is characterized by its great affinity
The aerospace industry uses a wide range of materials due to its characteristics, such as strength, density and stiffness.
Examples of such materials are nickel based superalloys and composites. But they are difficult to cut, and special methods of machining are required. As a result, diamonds are used wherever conventional tools can not be used to achieve the ultimate goal of the production process.
Use of diamonds to increase tool life and improve cutting conditions
The success of the use of diamond tools in the aerospace industry is mainly due to the properties that this material possesses and which lead to an increase in the service life of the tool and improvement of the cutting regimes in comparison with conventional materials.
Diamond has the highest value of hardness of minerals on the Mohs scale (Mohs). This scale allows you to classify the resistance of the material to the appearance of scratches and has a range from 1 (the softest) to 10 (the hardest).
The diamond has a hardness of 10 on the Mohs scale, which corresponds to a hardness four times higher than that of corundum (Al2O3), which is 9 on the Mohs scale.
Diamond tools can be created using different materials depending on the application and the requirements for the product. Diamonds can be divided into natural or synthetic. Materials from synthetic diamonds can be divided into different classes: grains and powders, PCD (polycrystalline diamonds) and diamonds obtained by CVD (chemical vapor deposition).
Grains from synthetic diamonds
Fine grains of diamonds and synthetic diamond powders (abrasives) are used as abrasive materials by binding them to the surface of the tool. This can be achieved in various ways, depending on the required technological characteristics, for example, the tool rotation speed.
Diamond particles can be deposited on the surface of the tool either by electrolytic deposition using a nickel solution or by sintering using a tungsten matrix. Another method, known as high-temperature brazing, is that diamond particles are soldered onto the metal surface of the tool.
Each of these bonding methods has the corresponding advantages and disadvantages associated with the time required to produce the tools and the ability of the binder to retain the diamond particles depending on the final performance.
Instruments using PCD (polycrystalline diamond)
In tools using PCD (or polycrystalline diamond inserts), diamond segments are connected, usually by high-temperature soldering, to a carbide substrate. PCD elements are produced by sintering micron powders of synthetic diamonds to adhere particles to a process characterized by high temperature and pressure.
This material is produced using cemented carbide firing, which provides the desired source of metal, usually cobalt, for the sintering process. During the manufacturing process, the metal from the carbide carbide substrate penetrates between the grains of the diamond, ensuring their adhesion.
The content of metals in tools with PCD provides the material with electrical conductivity, allowing the use of such a machining process as cutting on EDM (EDM) for cutting diamond elements.
Instruments using synthetic CVD diamonds
Another type of synthetic diamond is produced using a technique known as chemical vapor deposition (CVD). Diamonds obtained with CVD are deposited as thin layers on the surface of the tool during the process, with careful monitoring of the growth conditions.
One of the main advantages when using this type of synthetic diamond is the possibility of obtaining additional geometric dimensions and cutting edges, using a material characterized by highly predictable properties.
The use of diamonds in aerospace manufacturing processes
At present, diamonds are used in a number of manufacturing processes in aerospace engineering, mainly because of their high wear resistance and the ability to machine materials that are difficult to cut. As already mentioned, diamonds can be produced in various ways, obtaining a number of products with characteristics specially specified for the end use of tools. They can be used in processes that use tools with geometric parameters of the cutting edge (turning, milling and drilling) and not geometric parameters (grinding and finishing).
The use of diamonds in machining is limited to colored materials. Diamond is characterized by its great affinity with iron and nickel, especially at high temperatures. Particular attention must be paid at the maximum process temperature to avoid the transformation of diamond into graphite due to the unstable nature of this material.
In particular, at low pressures, the diamond surface was graphitized at a temperature below 1700 ° C; The conversion temperature can be reduced to 400 ° C if iron components are present.
As a result, carbide tools are currently used in the machining of titanium alloys, nickel alloys and stainless steel using tools with geometric parameters of the cutting edge. Conversely, in the case of abrasive processes, materials such as CBN (cubic boron nitride), aluminum oxide and SiC (silicon carbide) are used for machining steel, nickel alloys, ceramics and titanium alloys.
Another alternative to diamond in the machining of materials from ferrous metals is PCBN (polycrystalline cubic boron nitride), a composite material produced by sintering CBN powder of micron fractions with various types of ceramics.
http://www.azom.com/article.aspx?ArticleID=11948
Examples of such materials are nickel based superalloys and composites. But they are difficult to cut, and special methods of machining are required. As a result, diamonds are used wherever conventional tools can not be used to achieve the ultimate goal of the production process.
Use of diamonds to increase tool life and improve cutting conditions
The success of the use of diamond tools in the aerospace industry is mainly due to the properties that this material possesses and which lead to an increase in the service life of the tool and improvement of the cutting regimes in comparison with conventional materials.
Diamond has the highest value of hardness of minerals on the Mohs scale (Mohs). This scale allows you to classify the resistance of the material to the appearance of scratches and has a range from 1 (the softest) to 10 (the hardest).
The diamond has a hardness of 10 on the Mohs scale, which corresponds to a hardness four times higher than that of corundum (Al2O3), which is 9 on the Mohs scale.
Diamond tools can be created using different materials depending on the application and the requirements for the product. Diamonds can be divided into natural or synthetic. Materials from synthetic diamonds can be divided into different classes: grains and powders, PCD (polycrystalline diamonds) and diamonds obtained by CVD (chemical vapor deposition).
Grains from synthetic diamonds
Fine grains of diamonds and synthetic diamond powders (abrasives) are used as abrasive materials by binding them to the surface of the tool. This can be achieved in various ways, depending on the required technological characteristics, for example, the tool rotation speed.
Diamond particles can be deposited on the surface of the tool either by electrolytic deposition using a nickel solution or by sintering using a tungsten matrix. Another method, known as high-temperature brazing, is that diamond particles are soldered onto the metal surface of the tool.
Each of these bonding methods has the corresponding advantages and disadvantages associated with the time required to produce the tools and the ability of the binder to retain the diamond particles depending on the final performance.
Instruments using PCD (polycrystalline diamond)
In tools using PCD (or polycrystalline diamond inserts), diamond segments are connected, usually by high-temperature soldering, to a carbide substrate. PCD elements are produced by sintering micron powders of synthetic diamonds to adhere particles to a process characterized by high temperature and pressure.
This material is produced using cemented carbide firing, which provides the desired source of metal, usually cobalt, for the sintering process. During the manufacturing process, the metal from the carbide carbide substrate penetrates between the grains of the diamond, ensuring their adhesion.
The content of metals in tools with PCD provides the material with electrical conductivity, allowing the use of such a machining process as cutting on EDM (EDM) for cutting diamond elements.
Instruments using synthetic CVD diamonds
Another type of synthetic diamond is produced using a technique known as chemical vapor deposition (CVD). Diamonds obtained with CVD are deposited as thin layers on the surface of the tool during the process, with careful monitoring of the growth conditions.
One of the main advantages when using this type of synthetic diamond is the possibility of obtaining additional geometric dimensions and cutting edges, using a material characterized by highly predictable properties.
The use of diamonds in aerospace manufacturing processes
At present, diamonds are used in a number of manufacturing processes in aerospace engineering, mainly because of their high wear resistance and the ability to machine materials that are difficult to cut. As already mentioned, diamonds can be produced in various ways, obtaining a number of products with characteristics specially specified for the end use of tools. They can be used in processes that use tools with geometric parameters of the cutting edge (turning, milling and drilling) and not geometric parameters (grinding and finishing).
The use of diamonds in machining is limited to colored materials. Diamond is characterized by its great affinity with iron and nickel, especially at high temperatures. Particular attention must be paid at the maximum process temperature to avoid the transformation of diamond into graphite due to the unstable nature of this material.
In particular, at low pressures, the diamond surface was graphitized at a temperature below 1700 ° C; The conversion temperature can be reduced to 400 ° C if iron components are present.
As a result, carbide tools are currently used in the machining of titanium alloys, nickel alloys and stainless steel using tools with geometric parameters of the cutting edge. Conversely, in the case of abrasive processes, materials such as CBN (cubic boron nitride), aluminum oxide and SiC (silicon carbide) are used for machining steel, nickel alloys, ceramics and titanium alloys.
Another alternative to diamond in the machining of materials from ferrous metals is PCBN (polycrystalline cubic boron nitride), a composite material produced by sintering CBN powder of micron fractions with various types of ceramics.
http://www.azom.com/article.aspx?ArticleID=11948
Appeal to consumers of luxury watches is much more complicated
"Smart" watches Apple can now be animatedly discussed, but they face serious difficulties, both at the micro level and at the macro level.
The Apple Watch price formation scheme is at least unconvincing. There is little reason for any person, except for the furious, very rich Apple fan, to buy an expensive watch Apple Watch. As for the most expensive version of the Apple Watch Edition, Apple seems to be trying to invade the luxury watch market segment.
But the appeal to consumers of luxury watches is much more complicated than simply creating a golden version of something and demanding for it five times more.
The main reason that people buy expensive watches is not at all that this watch has a special functionality, and by and large it has little to do with the ability to show time. For collectors of luxury watches, design, craftsmanship, history and brand identity, as well as durability, are important.
The last - longevity - is key, because it is the main component of the value-based competitive offer, which Apple Watch obviously lacks, and this is the most vulnerable place for Apple Watch.
Mechanical watches for $ 10 000 with proper care will work and in 50 years as well as they worked on the day of their purchase. "Smart" watches, for example, Apple Watch, with their integrated design and non-replaceable components, will become obsolete in a couple of years.
Even if the battery has not run out of hours allotted to him the number of charge cycles, the other devices used by the owner of hours, will be much greater than the built in this clock a processor, screen, and their basic functions. This may be acceptable when it comes to watches worth $ 250, but it is absolutely ridiculous when talking about the clock for $ 17,000.
If someone can convince luxury watch buyers to become owners of "smart" luxury watches, they are the manufacturers of watches.
We have watched the traditional hours of responding to the trend associated with "smart" watches, and it is possible that some of these innovative attempts can help them to maintain and even expand the historically established demographics of users.
For example, Frederique Constant and Alpina are already producing what they call the "smart" Horological Smartwatch, which combines a traditional Swiss quartz movement with an analog dial with an integrated tracker, a user tracking device that synchronizes with the smartphone. This approach gives the owner of the watch the opportunity to receive metric data within the framework of the "Measure yourself" movement, related to activity tracking, sleep monitoring and adaptive sports instruction.
What sets them apart from Apple Watch and other purely digital "smart" watches? They do not require charging, the phone is a special brand, and they do not have to be thrown away or change the entire device when the technology changes.
This modular approach allows them to replace the device if they really need it, and the battery life, calculated for 2 years, is more attractive than the device that needs to be charged every 18 hours.
However, you can not check your email or respond to a text message using an analog dial, but these hours are attractive for luxury watch buyers who want to receive information about their activity and do not carry a second device for this purpose.
Other luxury brands also launch smart or connectable watches.
The main example in March at Baselworld, one of the largest trade trade shows, was the recent partnership between Tag Heuer and Google and Intel to develop smart watches. This was widely announced by an outstanding luxury brand, and although the watches were not shown at the exhibition, and we also know little about how they might look or how much it cost, but it was one of the most discussed news on the show.
This work of Tag Heuer was also a clear warning to Apple, as the partnership with Google means, probably, release only for Android.
Breitling, a luxury watch brand, mainly producing watches for pilots, demonstrated on Baselworld a prototype called B55 Connected, which is a variant of the multi-functional chronograph launched by the company last year. It combines an analog and digital displays and is connected to a smartphone, but the most important function is still a clock with a connected application designed to store data and make settings, for example, when setting the time.
Apple Watch, on the contrary, is mainly an intermediary module for your iPhone, so there's no need to take it out of your pocket.
Another way to attract the attention of lovers of luxury watches is difficult: the use of some technology "smart hours" in mechanical watches.
Real watch lovers tend to abandon quartz watches in favor of mechanical watches, which either start manually or with self-winding - that is, they are set up due to the kinetic energy generated by the movement of the wearer.
All of the current hybrid analog offerings mentioned here contain quartz watch movements with long-lasting batteries for powering both analog and digital components of the watch.
Any watch manufacturer that can figure out how to update and combine "smart" technology with an automatic clock mechanism, of course, will attract the attention of watch collectors.
Whether we are talking about purely digital smart watches or these hybrid analog watches, the question of durability is preserved.
Manufacturers of watches need to deal with the issue of durability, if they are going to achieve that serious buyers of luxury watches began to consider the issue of "smart" watches that reached the highest levels of price benchmarks. The key to solving the issue of durability is the modular design.
Mobile phones face the same difficulties. The lifespan of telephones with built-in non-replaceable batteries depends on the reduction in battery charging power.
When the battery can no longer keep charging, most people pay money for a new phone. The phones with replaceable batteries and connectors for micro SD cards are a good step in the right direction, but initiatives such as the fully modular phone Project Ara from Google will become completely destructive to the current state of affairs in the field of fully integrated phone designs.
Similarly, the service life of luxury smart watches can not depend on the variability of the lifetime of the non-replaceable battery.
http://www.luxurydaily.com/apple-watchs-downfalls-are-luxury-watchmakers-opportunities/
The Apple Watch price formation scheme is at least unconvincing. There is little reason for any person, except for the furious, very rich Apple fan, to buy an expensive watch Apple Watch. As for the most expensive version of the Apple Watch Edition, Apple seems to be trying to invade the luxury watch market segment.
But the appeal to consumers of luxury watches is much more complicated than simply creating a golden version of something and demanding for it five times more.
The main reason that people buy expensive watches is not at all that this watch has a special functionality, and by and large it has little to do with the ability to show time. For collectors of luxury watches, design, craftsmanship, history and brand identity, as well as durability, are important.
The last - longevity - is key, because it is the main component of the value-based competitive offer, which Apple Watch obviously lacks, and this is the most vulnerable place for Apple Watch.
Mechanical watches for $ 10 000 with proper care will work and in 50 years as well as they worked on the day of their purchase. "Smart" watches, for example, Apple Watch, with their integrated design and non-replaceable components, will become obsolete in a couple of years.
Even if the battery has not run out of hours allotted to him the number of charge cycles, the other devices used by the owner of hours, will be much greater than the built in this clock a processor, screen, and their basic functions. This may be acceptable when it comes to watches worth $ 250, but it is absolutely ridiculous when talking about the clock for $ 17,000.
If someone can convince luxury watch buyers to become owners of "smart" luxury watches, they are the manufacturers of watches.
We have watched the traditional hours of responding to the trend associated with "smart" watches, and it is possible that some of these innovative attempts can help them to maintain and even expand the historically established demographics of users.
For example, Frederique Constant and Alpina are already producing what they call the "smart" Horological Smartwatch, which combines a traditional Swiss quartz movement with an analog dial with an integrated tracker, a user tracking device that synchronizes with the smartphone. This approach gives the owner of the watch the opportunity to receive metric data within the framework of the "Measure yourself" movement, related to activity tracking, sleep monitoring and adaptive sports instruction.
What sets them apart from Apple Watch and other purely digital "smart" watches? They do not require charging, the phone is a special brand, and they do not have to be thrown away or change the entire device when the technology changes.
This modular approach allows them to replace the device if they really need it, and the battery life, calculated for 2 years, is more attractive than the device that needs to be charged every 18 hours.
However, you can not check your email or respond to a text message using an analog dial, but these hours are attractive for luxury watch buyers who want to receive information about their activity and do not carry a second device for this purpose.
Other luxury brands also launch smart or connectable watches.
The main example in March at Baselworld, one of the largest trade trade shows, was the recent partnership between Tag Heuer and Google and Intel to develop smart watches. This was widely announced by an outstanding luxury brand, and although the watches were not shown at the exhibition, and we also know little about how they might look or how much it cost, but it was one of the most discussed news on the show.
This work of Tag Heuer was also a clear warning to Apple, as the partnership with Google means, probably, release only for Android.
Breitling, a luxury watch brand, mainly producing watches for pilots, demonstrated on Baselworld a prototype called B55 Connected, which is a variant of the multi-functional chronograph launched by the company last year. It combines an analog and digital displays and is connected to a smartphone, but the most important function is still a clock with a connected application designed to store data and make settings, for example, when setting the time.
Apple Watch, on the contrary, is mainly an intermediary module for your iPhone, so there's no need to take it out of your pocket.
Another way to attract the attention of lovers of luxury watches is difficult: the use of some technology "smart hours" in mechanical watches.
Real watch lovers tend to abandon quartz watches in favor of mechanical watches, which either start manually or with self-winding - that is, they are set up due to the kinetic energy generated by the movement of the wearer.
All of the current hybrid analog offerings mentioned here contain quartz watch movements with long-lasting batteries for powering both analog and digital components of the watch.
Any watch manufacturer that can figure out how to update and combine "smart" technology with an automatic clock mechanism, of course, will attract the attention of watch collectors.
Whether we are talking about purely digital smart watches or these hybrid analog watches, the question of durability is preserved.
Manufacturers of watches need to deal with the issue of durability, if they are going to achieve that serious buyers of luxury watches began to consider the issue of "smart" watches that reached the highest levels of price benchmarks. The key to solving the issue of durability is the modular design.
Mobile phones face the same difficulties. The lifespan of telephones with built-in non-replaceable batteries depends on the reduction in battery charging power.
When the battery can no longer keep charging, most people pay money for a new phone. The phones with replaceable batteries and connectors for micro SD cards are a good step in the right direction, but initiatives such as the fully modular phone Project Ara from Google will become completely destructive to the current state of affairs in the field of fully integrated phone designs.
Similarly, the service life of luxury smart watches can not depend on the variability of the lifetime of the non-replaceable battery.
http://www.luxurydaily.com/apple-watchs-downfalls-are-luxury-watchmakers-opportunities/
Chinese tourists from mainland China who spend large sums of money
Now, when it's time to update contracts for this year, Chow Tai Fook Jewelery Group Ltd. Achieves a 20 percent discount on rental for some of its stores in Hong Kong, as sales of luxury goods in the city plummeted.
The company this year has already received a rent reduction of 10 -20 percent for some of its stores compared to the contracts for the previous year, said Kent Wong, managing director, without specifying the number of stores. He said that the extension of contracts in 2015 concerns about 30 of its branded stores in Hong Kong.
This year is "very special when we can negotiate with real estate owners," Wong said in an interview on May 8 in Hong Kong. "For us the driving force is demand; We expect that we will be able to get a 20 percent reduction in rent. "
Rent for retail stores in Hong Kong is falling, as the weakening of China's economy and its fight against corruption and waste have limited consumer spending. Affluent Chinese also choose other routes for travel. In March, the city experienced the first decline in visitors since June 2009, when sales of jewelry, wrist watches and other watches also fell for the sixth consecutive month.
Chow Tai Fook's comparable store sales in Hong Kong, Macao and other markets slipped 26 percent in the three months ended March in the year-ago quarter and fall for the fifth quarter. The company may close one or two stores in Hong Kong this year, including a branch in the Peak area, Wong said.
Shares of Chow Tai Fook fell 0.2 percent to HK $ 9.32 on the trading session at 10:25 in Hong Kong.
Opportunities for reducing
"Typically, rent of prestigious retail places in Hong Kong is hard to get by nature," said Catherine Lim, an analyst at Bloomberg Intelligence in Singapore. - For a retailer, this is still an attractive location for creating a brand. When renting not the most prestigious places, especially shops on ordinary streets, there may be more opportunities for lower prices. "
Chow Tai Fook, the world's largest registered jewelry company, has about 90 points of sale in Hong Kong, and almost half of the proceeds come from Mongkok and Tsim Sha Tsui, shopping areas popular with Chinese tourists.
Economists from Daiwa Capital Markets forecast a 4% drop in retail sales in Hong Kong this year compared to 2014.
Renting retail space in the city's four leading shopping areas fell 3.5 percent on a quarterly basis in the first three months of this year, according to a report released by Colliers International last month. It predicts that the rent of stores located on ordinary streets will drop another 9 percent in 2015, and there will be many free stores.
Overseas Chinese
Although the company has no plans to expand operations in Hong Kong this year, Wong does not rule out the possibility of opening a store if they can find a prestigious place with good rental conditions.
Wong said that after the opening of his first store in September, the company is considering increasing points of sale in duty-free shops in South Korea to reach Chinese tourists from mainland China who spend large sums of money.
Protests in Hong Kong against tourists from mainland China can redirect more Chinese to Korea and other places, wrote Cara Song, an analyst at Nomura Holdings Inc. in April.
This year, the growth in the number of tourists from mainland China will be reduced by half to 8 percent, according to the Hong Kong Tourism Board. Korea expects 18 percent more Chinese this year, according to Bloomberg Intelligence forecasts.
http://www.bloomberg.com/news/articles/2015-05-12/chow-tai-fook-seeks-20-discount-in-hong-kong-shop-rents-in-2015-i9lsy5r5
Having these figures, we can now calculate the world average value per carat
Not so long ago I posted a question on Twitter, asking people how much, in their opinion, there is one carat of diamonds. More specifically, I asked what, according to informed people, the average wholesale price per carat of diamonds. For fun, before you continue reading, select the number and keep it in mind.
In response to my question, I received responses from traders in diamonds, diamond brokers, representatives of diamond mining companies, industry observers and even a few people who were not directly involved in the diamond industry, at best diamond analysts. Some of them are quite familiar with the industry and are closely acquainted with a wide range of figures in the industry (they even participate in their formation in the course of their constant work, for example, in sales).
I myself thought that the answer to my question is a few hundred dollars. It was based on the understanding that there are many small diamonds with a low average price per carat, so low that they will pull the average price for a diamond to such a level that it will statistically affect the overall figure.
Interestingly, most of the answers people gave were close to mine, and almost all of us were wrong. The interval of the values received in response was broad, and by and large reflected the opinion that most of the goods are cheap (true), mostly with low color indices (also true), and in large part smaller - less than half of the carat (again correctly) . The figures varied from $ 100 per carat to a value well above $ 10,000 per carat.
SO, HOW TO DETERMINE THE AVERAGE PRICE?
Probably, there are several approaches to this issue, and the following method is very reliable. It is based on proven figures, well-studied data, such as the percentage of diamond quality diamonds from total diamond production and the diamond output of polished diamond producers - the average weight of the diamond versus the rough diamond from which the diamond was obtained.
DATA COLLECTION
In 2013 - the last year for which all figures are available, the total world diamond output was 130,482,194.53 carats, according to the Kimberley Process (KP) Annual Global Summary.
The world's annual output of diamonds is divided into diamonds of technical quality and of jewelery quality. The ratio between these varieties is different from the mine to the mine, from the tube to the tube and even on the same tube. ALROSA, the world's largest diamond producer in terms of volume, reported in 2013 and 2014 that its production volumes (in carats) of quality jewelery diamonds rose to 70% of total diamond sales, and in 2012 this figure was 67 percent.
According to the world diamond report of Bain & Co. Journey Through the Value Chain, about 55% of the world's production volume is made up of gem quality diamonds. This category actually includes an assortment of goods, known as "quality close to jewelry", which were not previously considered as jewels of jewelery quality. But over the years these stones have been added to the offerings of diamonds for sale in jewelry. Thus, for our purpose of calculating the price of diamonds used in jewelry, it is necessary to take into account diamonds of quality close to jewelry, because they are actually used in jewelry.
After determining the number of diamonds used to produce the diamonds that will be installed in the jewelry, let's go back to the production of diamonds - the process of cutting and polishing diamonds. During cutting, some of the weight of the diamond is lost. Losses usually range from as little as 40% of the total weight (which means 60% yield) to as much as 70% (yield 30%). It depends not only on the shape of the diamond, but also on the shape of the diamond, which the diamond manufacturer decides to make - and there are usually several possible options.
Diamonds are divided into models - a form of diamonds. In the Sawables model, the yield is about 45-60%, the Makeables output is about 35-45%, and the lowest yield for models such as Flats and Chips is 15-35%.
Usually the diamond manufacturer tries to get the maximum revenue for the value of the diamond, so the total price of the diamond can determine what the diamond will be, which means that the exit indicator is given a lower priority. Manufacturers of diamonds believe that the average yield is about 40 percent.
Finally, the total value of diamonds produced by the global industry is about $ 19- $ 22 billion annually. In 2013, Chaim Even Zohar (Chaim Even Zohar) determined this figure of production at $ 21.6 billion.
CALCULATION OF THE AVERAGE PRICE
Having these figures, we can now calculate the world average value per carat based on the wholesale value of diamonds. If the annual world diamond production in 2013 amounted to a total of 130.5 million carats, and 55% of this volume was the volume of production of diamond jewelry, then the world's production of gem quality diamonds amounted to 71.8 million carats. Of course, not everything that is extracted from the bowels in a certain year is sold during this year, but most of this volume, and, ultimately, all this volume is sold, so the situation is leveled.
In fact, about 71.8 million carats of quality jewelery were shipped to the global diamond sector in the same year. With an average output of 40%, the volume of production of this product was 28.7 million carats of diamonds. This is the volume of the supply of diamonds, ready for use in all types of jewelry.
As stated above, this production is estimated at $ 21.6 billion. This is at wholesale prices before branding, retail margins or even intra-trade surcharges. Finally, dividing the cost of production by volume, we obtain an average price per carat of $ 752.
http://edahngolan.com/what-is-the-price-of-a-diamond/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=92e01da873-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-92e01da873-319355397
In response to my question, I received responses from traders in diamonds, diamond brokers, representatives of diamond mining companies, industry observers and even a few people who were not directly involved in the diamond industry, at best diamond analysts. Some of them are quite familiar with the industry and are closely acquainted with a wide range of figures in the industry (they even participate in their formation in the course of their constant work, for example, in sales).
I myself thought that the answer to my question is a few hundred dollars. It was based on the understanding that there are many small diamonds with a low average price per carat, so low that they will pull the average price for a diamond to such a level that it will statistically affect the overall figure.
Interestingly, most of the answers people gave were close to mine, and almost all of us were wrong. The interval of the values received in response was broad, and by and large reflected the opinion that most of the goods are cheap (true), mostly with low color indices (also true), and in large part smaller - less than half of the carat (again correctly) . The figures varied from $ 100 per carat to a value well above $ 10,000 per carat.
SO, HOW TO DETERMINE THE AVERAGE PRICE?
Probably, there are several approaches to this issue, and the following method is very reliable. It is based on proven figures, well-studied data, such as the percentage of diamond quality diamonds from total diamond production and the diamond output of polished diamond producers - the average weight of the diamond versus the rough diamond from which the diamond was obtained.
DATA COLLECTION
In 2013 - the last year for which all figures are available, the total world diamond output was 130,482,194.53 carats, according to the Kimberley Process (KP) Annual Global Summary.
The world's annual output of diamonds is divided into diamonds of technical quality and of jewelery quality. The ratio between these varieties is different from the mine to the mine, from the tube to the tube and even on the same tube. ALROSA, the world's largest diamond producer in terms of volume, reported in 2013 and 2014 that its production volumes (in carats) of quality jewelery diamonds rose to 70% of total diamond sales, and in 2012 this figure was 67 percent.
According to the world diamond report of Bain & Co. Journey Through the Value Chain, about 55% of the world's production volume is made up of gem quality diamonds. This category actually includes an assortment of goods, known as "quality close to jewelry", which were not previously considered as jewels of jewelery quality. But over the years these stones have been added to the offerings of diamonds for sale in jewelry. Thus, for our purpose of calculating the price of diamonds used in jewelry, it is necessary to take into account diamonds of quality close to jewelry, because they are actually used in jewelry.
After determining the number of diamonds used to produce the diamonds that will be installed in the jewelry, let's go back to the production of diamonds - the process of cutting and polishing diamonds. During cutting, some of the weight of the diamond is lost. Losses usually range from as little as 40% of the total weight (which means 60% yield) to as much as 70% (yield 30%). It depends not only on the shape of the diamond, but also on the shape of the diamond, which the diamond manufacturer decides to make - and there are usually several possible options.
Diamonds are divided into models - a form of diamonds. In the Sawables model, the yield is about 45-60%, the Makeables output is about 35-45%, and the lowest yield for models such as Flats and Chips is 15-35%.
Usually the diamond manufacturer tries to get the maximum revenue for the value of the diamond, so the total price of the diamond can determine what the diamond will be, which means that the exit indicator is given a lower priority. Manufacturers of diamonds believe that the average yield is about 40 percent.
Finally, the total value of diamonds produced by the global industry is about $ 19- $ 22 billion annually. In 2013, Chaim Even Zohar (Chaim Even Zohar) determined this figure of production at $ 21.6 billion.
CALCULATION OF THE AVERAGE PRICE
Having these figures, we can now calculate the world average value per carat based on the wholesale value of diamonds. If the annual world diamond production in 2013 amounted to a total of 130.5 million carats, and 55% of this volume was the volume of production of diamond jewelry, then the world's production of gem quality diamonds amounted to 71.8 million carats. Of course, not everything that is extracted from the bowels in a certain year is sold during this year, but most of this volume, and, ultimately, all this volume is sold, so the situation is leveled.
In fact, about 71.8 million carats of quality jewelery were shipped to the global diamond sector in the same year. With an average output of 40%, the volume of production of this product was 28.7 million carats of diamonds. This is the volume of the supply of diamonds, ready for use in all types of jewelry.
As stated above, this production is estimated at $ 21.6 billion. This is at wholesale prices before branding, retail margins or even intra-trade surcharges. Finally, dividing the cost of production by volume, we obtain an average price per carat of $ 752.
http://edahngolan.com/what-is-the-price-of-a-diamond/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=92e01da873-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-92e01da873-319355397
Which is another sign of a growing split between De Beers and its customers
If you try to be an optimist, you can hear the voices of those who say: "De Beers, finally, understood and lowered prices." Although this may be true and important, but the question concerns not only the price but also the quality. While the global diamond industry is struggling to move forward, the United States government has revised its performance in terms of jewelry sales. According to revised data, sales volumes were worse than previously reported. As for the future, it does not look too good either.
VALUE AND VOLUMES OF DIAMOND RAW MATERIALS
As expected, De Beers lowered prices for rough diamonds on the May website. Prices were reduced by an average of 2.5%, and prices for some goods were reduced by as much as 8 percent. This price reduction became necessary because the price of diamonds is relatively low. From the point of view of diamond manufacturers, this means that cutting and selling diamonds are an economically ineffective option. If consumers do not hunt for diamonds actively, then prices for diamond jewelry are either reduced, or such jewelry is simply not sold. This drop in demand reduces the price of diamonds. From this point of view, prices for rough diamonds need to be lowered to meet the real demand and prices for diamonds.
At the same time, the decline in prices for diamonds is a double-edged sword. It not only does not help the diamond producers, it can also harm them, because a decrease in the price of diamonds will reduce the value of the stockpiles in which they have invested serious money. Therefore, although diamonds producers need to reduce prices for diamonds, they also want it to be weighed, even moderately.
Puzzled? Let me add one more aspect to the issue related to the price - sightholders complain that prices have not been sufficiently reduced - not enough to again make diamonds profitable. This is quite true and brings us back to the issue of volume.
The reduction in supply does not reduce the burden of stockpiling, which is not sold quickly enough (and by reducing the volume of purchases of rough diamonds, they can also create a positive cash flow more easily), and reduce the amount of capital associated with large inventory. In addition, there is also a deficit, which contributes to higher prices. Thus, the combination of a moderate price reduction with a reduction in supply will be better not only for diamond producers, but also for retailers.
The estimated size of the May site was known exactly: ~ $ 400 million - the usual offer, another ~ $ 50 million - special offer and about $ 50 million - an unscheduled offer for a total of $ 500 million, perhaps a little less. Applications for an unscheduled proposal related to special products that are still profitable. De Beers satisfied these applications - when sightholders asked for unscheduled deliveries, they received them.
This gives a signal that De Beers will not cut the offer if it is within its power. The reduction in supply depends (at least in part) on sightholders. De Beers will express its intention to make the proposal (ITO) in full and offer an unscheduled amount to anyone who asks for it. With additional reserves of about $ 0.5 billion, which is almost another site, De Beers is more than happy to supply at any time and as much as it can.
De Beers produced 7.7 million carats in the first quarter of 2015, a 2% increase year-on-year, mainly due to a higher content at the Venetia mine. Currently, the company does not need this additional stock, so it recently announced that "in the light of current trading conditions" it will cut production from 32-34 million carats to 30-32 million carats (~ 6.5%). In 2014, the company's production volume was 32.6 million carats, so like it or not, De Beers expects demand for rough diamonds will be lower, at least until the end of this year.
SITE 4: NEW CONTRACTS, EXISTING PROBLEMS
In the secondary market, there was a very low demand for De Beers products. Boxes of Collection and Fine stones weighing 5-10 carats were not interested in buyers on the Bluedex marketplace. On the other hand, stones with imperfections were in demand.
Failures amounted to approximately 5% of the volume of goods at a cost, which is a bit. This is reasonable, given the reduction in prices and the limited supply.
Traders claimed that the assortments of many of the 3-6 graders and the Indian boxes of the Cleavage category were not good. Assortments of boxes Preparers and Commons in weight in 2,5-10 carats became better. This improvement, combined with a drop in prices in price lists, made these two types of goods profitable. Premiums in the secondary market amounted to about 2-3% with terms of the loan, which meant that the sellers were losing about 1 percent.
Changes in De Beers price lists, by the way, varied - from a drop of more than 10% to an increase of about 26 percent. This is a very wide range, but keep in mind that this is the assortment that determines the final cost of the box and the real price.
NO CASE FOR CELEBRATION
In problems of ensuring an uninterrupted supply - and De Beers recognizes them - there usually comes a short pause in order to celebrate the usual new contract period. But the new accredited buyers (Accredited Buyers), and the traditional dinner, and a slight change in the sightholders list were far from celebratory and joyful. In fact, several leading traders decided not to attend the dinner, which is another sign of a growing split between De Beers and its customers.
In past times, the new contract period meant a certain change of guard - several new companies were added to the category of sightholders, and some left. This time, very little was added, but only two left. This is in line with the new selection process, characterized by simplifying the filing process and virtually preserving existing clients until there is a good reason to part with them (see attached full list).
THE GREEK TRAGEDY
The May site - the first in the contract period 2015 - 2018 - was planned to be small: sightholders applied for a cautious schedule of deliveries (under the procedure "intention to make an offer, ITO"). Of the 10 sites by the first year of the contract period, the requested ITOs were facilitated for the first site due to the fact that sightholders stated that they did not need a lot of supplies at that time.
On the contrary, it is expected that the following sites that are to be held in June after the Las Vegas trade fair (JCL Las Vegas) will be large, which raises the question of whether diamond manufacturers will face greater overproduction?
Frankly, not only they suffer. The decline in demand and prices, combined with the large amount of failures in the last few months, have dealt a serious blow to the cash flow of De Beers, as well as to Anglo American, the parent company that depends on De Beers, which is the source of 28% of its revenue.
According to one insider, De Beers "is trying to stay afloat." She has big overhead costs for labor and energy, and she needs a push for her cash flow from an external source. If the exhibition in Las Vegas is a low activity, as expected, and will not profit, then the sightholders and De Beers will reach a "critical point", he added. Sightholders will be asked to postpone the delivery of the goods and may refuse the goods that are not profitable. De Beers will try to pass as much as possible into the hands of its customers, which will lead to an arm wrestling competition, which will end with the loss of one side or both. Even if one side loses in this struggle, the consequences are such that both will be paid. From my lessons in literature, if I remember correctly, this is called "Greek tragedy."
ANOTHER BAD NEWS FOR THE MARKET RETAIL TRADE
During the Cold War, Western intelligence services usually monitored changes in the Soviet regime, looking at photos from events that attended the top management. Historical analysis, for example, the absence of a general in the official photos of the May parade a few years after they were made, showed that this man fell into disgrace.
The US Department of Commerce, the source of the most reliable data on retail trade, on May 13 published revised data on retail sales of specialized products. He analyzed the history of the jewelry market of the United States, which indicates that this segment of the market in the United States is gradually acquiring the status of persona non grata.
When reviewing the period in seven years to January 2008, all sales figures were reduced. The most dramatic revision was made in 2013 and 2014, for which sales volumes were reduced by 8.9% and 9.3%, respectively, albeit shamelessly. Not that the real cash flow through the register has changed at the same time. At the same time, only more carefully "disguises" what actually happened on the market in those years since the crisis of 2008.
According to the revised data, sales of specialized jewelry companies in 2013 rose by only 1.8% year-on-year, and in 2014 they increased by 0.7% to $ 30.5 billion. Sales volumes in the holiday season in November and December fell to 4.4% year on year.
http://edahngolan.com/sight-okay-retail-not-at-all/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=7abb33c624-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-7abb33c624-319355397
VALUE AND VOLUMES OF DIAMOND RAW MATERIALS
As expected, De Beers lowered prices for rough diamonds on the May website. Prices were reduced by an average of 2.5%, and prices for some goods were reduced by as much as 8 percent. This price reduction became necessary because the price of diamonds is relatively low. From the point of view of diamond manufacturers, this means that cutting and selling diamonds are an economically ineffective option. If consumers do not hunt for diamonds actively, then prices for diamond jewelry are either reduced, or such jewelry is simply not sold. This drop in demand reduces the price of diamonds. From this point of view, prices for rough diamonds need to be lowered to meet the real demand and prices for diamonds.
At the same time, the decline in prices for diamonds is a double-edged sword. It not only does not help the diamond producers, it can also harm them, because a decrease in the price of diamonds will reduce the value of the stockpiles in which they have invested serious money. Therefore, although diamonds producers need to reduce prices for diamonds, they also want it to be weighed, even moderately.
Puzzled? Let me add one more aspect to the issue related to the price - sightholders complain that prices have not been sufficiently reduced - not enough to again make diamonds profitable. This is quite true and brings us back to the issue of volume.
The reduction in supply does not reduce the burden of stockpiling, which is not sold quickly enough (and by reducing the volume of purchases of rough diamonds, they can also create a positive cash flow more easily), and reduce the amount of capital associated with large inventory. In addition, there is also a deficit, which contributes to higher prices. Thus, the combination of a moderate price reduction with a reduction in supply will be better not only for diamond producers, but also for retailers.
The estimated size of the May site was known exactly: ~ $ 400 million - the usual offer, another ~ $ 50 million - special offer and about $ 50 million - an unscheduled offer for a total of $ 500 million, perhaps a little less. Applications for an unscheduled proposal related to special products that are still profitable. De Beers satisfied these applications - when sightholders asked for unscheduled deliveries, they received them.
This gives a signal that De Beers will not cut the offer if it is within its power. The reduction in supply depends (at least in part) on sightholders. De Beers will express its intention to make the proposal (ITO) in full and offer an unscheduled amount to anyone who asks for it. With additional reserves of about $ 0.5 billion, which is almost another site, De Beers is more than happy to supply at any time and as much as it can.
De Beers produced 7.7 million carats in the first quarter of 2015, a 2% increase year-on-year, mainly due to a higher content at the Venetia mine. Currently, the company does not need this additional stock, so it recently announced that "in the light of current trading conditions" it will cut production from 32-34 million carats to 30-32 million carats (~ 6.5%). In 2014, the company's production volume was 32.6 million carats, so like it or not, De Beers expects demand for rough diamonds will be lower, at least until the end of this year.
SITE 4: NEW CONTRACTS, EXISTING PROBLEMS
In the secondary market, there was a very low demand for De Beers products. Boxes of Collection and Fine stones weighing 5-10 carats were not interested in buyers on the Bluedex marketplace. On the other hand, stones with imperfections were in demand.
Failures amounted to approximately 5% of the volume of goods at a cost, which is a bit. This is reasonable, given the reduction in prices and the limited supply.
Traders claimed that the assortments of many of the 3-6 graders and the Indian boxes of the Cleavage category were not good. Assortments of boxes Preparers and Commons in weight in 2,5-10 carats became better. This improvement, combined with a drop in prices in price lists, made these two types of goods profitable. Premiums in the secondary market amounted to about 2-3% with terms of the loan, which meant that the sellers were losing about 1 percent.
Changes in De Beers price lists, by the way, varied - from a drop of more than 10% to an increase of about 26 percent. This is a very wide range, but keep in mind that this is the assortment that determines the final cost of the box and the real price.
NO CASE FOR CELEBRATION
In problems of ensuring an uninterrupted supply - and De Beers recognizes them - there usually comes a short pause in order to celebrate the usual new contract period. But the new accredited buyers (Accredited Buyers), and the traditional dinner, and a slight change in the sightholders list were far from celebratory and joyful. In fact, several leading traders decided not to attend the dinner, which is another sign of a growing split between De Beers and its customers.
In past times, the new contract period meant a certain change of guard - several new companies were added to the category of sightholders, and some left. This time, very little was added, but only two left. This is in line with the new selection process, characterized by simplifying the filing process and virtually preserving existing clients until there is a good reason to part with them (see attached full list).
THE GREEK TRAGEDY
The May site - the first in the contract period 2015 - 2018 - was planned to be small: sightholders applied for a cautious schedule of deliveries (under the procedure "intention to make an offer, ITO"). Of the 10 sites by the first year of the contract period, the requested ITOs were facilitated for the first site due to the fact that sightholders stated that they did not need a lot of supplies at that time.
On the contrary, it is expected that the following sites that are to be held in June after the Las Vegas trade fair (JCL Las Vegas) will be large, which raises the question of whether diamond manufacturers will face greater overproduction?
Frankly, not only they suffer. The decline in demand and prices, combined with the large amount of failures in the last few months, have dealt a serious blow to the cash flow of De Beers, as well as to Anglo American, the parent company that depends on De Beers, which is the source of 28% of its revenue.
According to one insider, De Beers "is trying to stay afloat." She has big overhead costs for labor and energy, and she needs a push for her cash flow from an external source. If the exhibition in Las Vegas is a low activity, as expected, and will not profit, then the sightholders and De Beers will reach a "critical point", he added. Sightholders will be asked to postpone the delivery of the goods and may refuse the goods that are not profitable. De Beers will try to pass as much as possible into the hands of its customers, which will lead to an arm wrestling competition, which will end with the loss of one side or both. Even if one side loses in this struggle, the consequences are such that both will be paid. From my lessons in literature, if I remember correctly, this is called "Greek tragedy."
ANOTHER BAD NEWS FOR THE MARKET RETAIL TRADE
During the Cold War, Western intelligence services usually monitored changes in the Soviet regime, looking at photos from events that attended the top management. Historical analysis, for example, the absence of a general in the official photos of the May parade a few years after they were made, showed that this man fell into disgrace.
The US Department of Commerce, the source of the most reliable data on retail trade, on May 13 published revised data on retail sales of specialized products. He analyzed the history of the jewelry market of the United States, which indicates that this segment of the market in the United States is gradually acquiring the status of persona non grata.
When reviewing the period in seven years to January 2008, all sales figures were reduced. The most dramatic revision was made in 2013 and 2014, for which sales volumes were reduced by 8.9% and 9.3%, respectively, albeit shamelessly. Not that the real cash flow through the register has changed at the same time. At the same time, only more carefully "disguises" what actually happened on the market in those years since the crisis of 2008.
According to the revised data, sales of specialized jewelry companies in 2013 rose by only 1.8% year-on-year, and in 2014 they increased by 0.7% to $ 30.5 billion. Sales volumes in the holiday season in November and December fell to 4.4% year on year.
http://edahngolan.com/sight-okay-retail-not-at-all/?utm_source=Edahn+Golan+Diamond+Research+%26+Data+Newsletter&utm_campaign=7abb33c624-RSS_feed_newsletter_campaign3_12_2015&utm_medium=email&utm_term=0_3db00ffc52-7abb33c624-319355397
Diamond production volumes will reach their peak by the end of the decade, pushing prices upwards
Diamonds and banking rules seem to have a lot in common with each other.
But under the pressure of supervisory observers from the government, banks around the world began to exercise caution in providing loans for the opaque diamond and diamond industry. The resulting reduction in credit causes market turbulence with far-reaching consequences for participants in the wholesale trade in precious stones, as well as for companies mining diamonds from the bowels.
Philippe Mellier, CEO of De Beers, the dominant diamond producer, calls it a "revolution" due not only to stricter loan standards, but also to changes in retail trade that force traders, cutters and polishers in such places , Like Antwerp in Belgium or Dubai in the United Arab Emirates respond more quickly to changing tastes and demand.
"This is a new business model for an industry that has remained conservative for 100 years," Mr. Meiller said over the phone from Gaborone, the capital of Botswana. This country is the place where De Beers, the largest diamond mining company, is located.
"The tension does not arise from demand, which continues to grow," said Mr. Mélier. "It's because of the change in the industry."
Changes in the diamond business are unlikely to be felt by engaged couples, which are the driving force of demand in the United States, accounting for 40% of global diamond sales. Retail prices are likely to remain stable or even fall slightly, although there may be small changes in the quality of diamonds in order to avoid price increases, analysts and industry representatives say. And buyers may have to pay more, as the production of diamonds and diamonds will reach a peak by the end of the decade.
But there is already a lot of pressure on the so-called middle segment of the diamond pipeline - a segment of processing raw materials and manufacturing products in the industry: these are companies in China, India, Belgium and other places that buy diamonds from those who manage mines, then polish and polish diamonds for Use them in jewelry.
The Changing Market
Having received orders from regulators to reduce risks, the Belgian KBC bank said last year that it would curtail the activities of the unit in Antwerp, which was once the largest in providing loans to the diamond and diamond industry. Leumi Bank in Israel reported last year that it is withdrawing from the diamond business, and other banks, including ABN Amro in the Netherlands, have tightened their lending standards.
"The situation in the diamond and diamond market is not at all positive, but really terrible," says Charles Wyndham, founder of Polished Prices, a London-based company that tracks the market. "The most urgent issue is liquidity."
Others show less pessimism and say that new creditors have emerged to replace banks that have emerged from the diamond-diamond business. At the same time, there is an arrangement according to which banks now study the diamond-diamond industry much more thoroughly, forcing it to streamline its operations in order to avoid the risk of being cut off from financing.
"There is enough liquidity for good companies that are transparent, profitable and acceptable to banks," said Erik Jens, ABN Amro's director of customer relations for the diamond and jewelry industries. - There are companies that are not, and they do not get money. It is obvious".
So far, the effect on De Beers has been hushed up. Last year was good for De Beers, no longer possessing the actual monopoly that it once owned, but the company still accounts for about a third of the world diamond market. De Beers, a member of the Anglo American corporation, a raw material producer, reported an increase in operating profit of 36 percent or $ 1.4 billion from $ 7 billion in sales in 2014.
But the difficulties were felt by other producers of diamonds. Petra Diamonds, listed on the London Stock Exchange and managing mines in South Africa, said on April 16 that sales for the first three months of 2015 fell 41 percent to $ 96.1 million. Petra explains the decline partly due to the problems experienced by wholesalers in obtaining loans for the purchase of rough diamonds.
De Beers responded to the tightening of lending standards by imposing new requirements on so-called sightholders - 85 companies authorized to buy diamonds from it. In March, De Beers introduced new three-year contracts, which require sightholders to adhere to international reporting standards, provide their financial documents for analysis by qualified auditors and reduce their dependence on borrowed funds.
"They need to be financially more stable, and then they will be able to attract the necessary money from banks," said Mr. Meillier, CEO of De Beers. He said that De Beers' long-term contracts with buyers make it less sensitive to fluctuations in the spot market, which hit hard on other suppliers.
Precautionary measures
The unrest in the diamond and diamond industry is an unforeseen consequence of the new rules introduced to avoid the recurrence of the financial crisis that erupted in 2008.
The Basel Committee, which consists of a group of major bankers and regulators from around the world, which holds meetings in the Swiss city of Basel, probably did not pay too much attention to the diamond and diamond industry in developing its new recommendations. It should be recognized that some wholesalers selling diamonds and diamonds may have been engaged in such matters that this committee seeks to prevent, including excessive dependence on borrowed funds. (Providing a diamond and diamond loan is itself risky, there are thousands of varieties of diamonds and diamonds, and it's extremely difficult to assess the precious stones used as collateral for a loan.)
In addition, the diamond industry faces many challenges. Sales in China, the largest market, declined in part because the anti-corruption campaign forced civil servants and their families to refrain from demonstrating wealth.
Forecasts saying that diamond and diamond production volumes will reach their peak by the end of the decade, pushing prices upwards, have their supporters and critics. Most of the diamonds in the world come from a relatively small number of mines located in Africa, Canada, Russia and several other places. ALROSA, the Russian diamond mining company, has become the largest in terms of volumes, although De Beers remains the leader in terms of value in dollar terms.
Mr. Jens of ABN Amro said that he doubted the forecasts of a growing diamond deficit. New deposits can be discovered, he said, and diamonds created by human hands, which are becoming increasingly difficult to distinguish from diamonds from diamonds extracted from the bowels of the earth, can meet some of the demand in the market.
http://www.nytimes.com/2015/05/14/fashion/reshaping-the-worlds-diamond-market.html?_r=3
But under the pressure of supervisory observers from the government, banks around the world began to exercise caution in providing loans for the opaque diamond and diamond industry. The resulting reduction in credit causes market turbulence with far-reaching consequences for participants in the wholesale trade in precious stones, as well as for companies mining diamonds from the bowels.
Philippe Mellier, CEO of De Beers, the dominant diamond producer, calls it a "revolution" due not only to stricter loan standards, but also to changes in retail trade that force traders, cutters and polishers in such places , Like Antwerp in Belgium or Dubai in the United Arab Emirates respond more quickly to changing tastes and demand.
"This is a new business model for an industry that has remained conservative for 100 years," Mr. Meiller said over the phone from Gaborone, the capital of Botswana. This country is the place where De Beers, the largest diamond mining company, is located.
"The tension does not arise from demand, which continues to grow," said Mr. Mélier. "It's because of the change in the industry."
Changes in the diamond business are unlikely to be felt by engaged couples, which are the driving force of demand in the United States, accounting for 40% of global diamond sales. Retail prices are likely to remain stable or even fall slightly, although there may be small changes in the quality of diamonds in order to avoid price increases, analysts and industry representatives say. And buyers may have to pay more, as the production of diamonds and diamonds will reach a peak by the end of the decade.
But there is already a lot of pressure on the so-called middle segment of the diamond pipeline - a segment of processing raw materials and manufacturing products in the industry: these are companies in China, India, Belgium and other places that buy diamonds from those who manage mines, then polish and polish diamonds for Use them in jewelry.
The Changing Market
Having received orders from regulators to reduce risks, the Belgian KBC bank said last year that it would curtail the activities of the unit in Antwerp, which was once the largest in providing loans to the diamond and diamond industry. Leumi Bank in Israel reported last year that it is withdrawing from the diamond business, and other banks, including ABN Amro in the Netherlands, have tightened their lending standards.
"The situation in the diamond and diamond market is not at all positive, but really terrible," says Charles Wyndham, founder of Polished Prices, a London-based company that tracks the market. "The most urgent issue is liquidity."
Others show less pessimism and say that new creditors have emerged to replace banks that have emerged from the diamond-diamond business. At the same time, there is an arrangement according to which banks now study the diamond-diamond industry much more thoroughly, forcing it to streamline its operations in order to avoid the risk of being cut off from financing.
"There is enough liquidity for good companies that are transparent, profitable and acceptable to banks," said Erik Jens, ABN Amro's director of customer relations for the diamond and jewelry industries. - There are companies that are not, and they do not get money. It is obvious".
So far, the effect on De Beers has been hushed up. Last year was good for De Beers, no longer possessing the actual monopoly that it once owned, but the company still accounts for about a third of the world diamond market. De Beers, a member of the Anglo American corporation, a raw material producer, reported an increase in operating profit of 36 percent or $ 1.4 billion from $ 7 billion in sales in 2014.
But the difficulties were felt by other producers of diamonds. Petra Diamonds, listed on the London Stock Exchange and managing mines in South Africa, said on April 16 that sales for the first three months of 2015 fell 41 percent to $ 96.1 million. Petra explains the decline partly due to the problems experienced by wholesalers in obtaining loans for the purchase of rough diamonds.
De Beers responded to the tightening of lending standards by imposing new requirements on so-called sightholders - 85 companies authorized to buy diamonds from it. In March, De Beers introduced new three-year contracts, which require sightholders to adhere to international reporting standards, provide their financial documents for analysis by qualified auditors and reduce their dependence on borrowed funds.
"They need to be financially more stable, and then they will be able to attract the necessary money from banks," said Mr. Meillier, CEO of De Beers. He said that De Beers' long-term contracts with buyers make it less sensitive to fluctuations in the spot market, which hit hard on other suppliers.
Precautionary measures
The unrest in the diamond and diamond industry is an unforeseen consequence of the new rules introduced to avoid the recurrence of the financial crisis that erupted in 2008.
The Basel Committee, which consists of a group of major bankers and regulators from around the world, which holds meetings in the Swiss city of Basel, probably did not pay too much attention to the diamond and diamond industry in developing its new recommendations. It should be recognized that some wholesalers selling diamonds and diamonds may have been engaged in such matters that this committee seeks to prevent, including excessive dependence on borrowed funds. (Providing a diamond and diamond loan is itself risky, there are thousands of varieties of diamonds and diamonds, and it's extremely difficult to assess the precious stones used as collateral for a loan.)
In addition, the diamond industry faces many challenges. Sales in China, the largest market, declined in part because the anti-corruption campaign forced civil servants and their families to refrain from demonstrating wealth.
Forecasts saying that diamond and diamond production volumes will reach their peak by the end of the decade, pushing prices upwards, have their supporters and critics. Most of the diamonds in the world come from a relatively small number of mines located in Africa, Canada, Russia and several other places. ALROSA, the Russian diamond mining company, has become the largest in terms of volumes, although De Beers remains the leader in terms of value in dollar terms.
Mr. Jens of ABN Amro said that he doubted the forecasts of a growing diamond deficit. New deposits can be discovered, he said, and diamonds created by human hands, which are becoming increasingly difficult to distinguish from diamonds from diamonds extracted from the bowels of the earth, can meet some of the demand in the market.
http://www.nytimes.com/2015/05/14/fashion/reshaping-the-worlds-diamond-market.html?_r=3
Good sales channel is provided by the largest national retailers
Each time when mentioning synthetic diamonds in a conversation, they always touch on the familiar topic of identifying and declaring the origin of stones. The industry continues to discuss in detail the consequences of mixing synthetic diamonds with natural diamonds, and this even with the technology of their recognition.
The difficulty is that at present technology is too expensive for many industry participants. But as this technology develops, it becomes more and more accessible and widespread; It's only a matter of time, when the recognition of synthetic and natural diamonds will cease to be a problem.
Personally, I'm more concerned with what will happen after solving the identification problem, and here I'm most concerned with what, in my opinion, will become the two main drivers of the synthetic diamonds industry when it moves forward: 1) price formation and 2) distribution.
An interesting indicator for the market of synthetic diamonds is the precious stones market: rubies, emeralds and sapphires. The market for synthetic analogues for these precious stones has strengthened several years ago, and now it is more than the market of natural stones. This was hampered in the form of trade restrictions and created other difficulties that led to a reduction in supply and price increases. In recent years, the volume of production of these synthetic gemstones has grown, and the product has been accepted by the industry of the production and marketing of jewelry. As a result, there was a favorable difference in prices for synthetic and natural stones, and a good sales channel is provided by the largest national retailers.
Currently, the situation in the diamond-diamond industry is opposite: the position of the diamond mining industry is relatively stable, although there has been a trend to reduce supply since the peak of production in the mid-2000s was reached and there is a non-existent sales channel in retail trade Synthetic diamonds. According to my estimates, synthetic jewelery quality diamonds currently make up only about 1-2% of the total diamond jewelry market (for example, 1-2 of every 100 carats sold are synthetic diamonds, see table 1).
Although the technology of producing synthetic diamonds has existed for almost 65 years, until recently there were no colorless synthetic diamonds weighing 1 carat and above, suitable for the wedding ring. For example, in early 2013, Gemesis, now known as Pure Grown Diamonds, produced a 1.29 carat synthetic diamond, E color, VVS2 purity, emerald cut, which at that time was declared "the world's largest whiteest grown in Lab diamond. " Traditionally, the synthetic diamonds industry concentrates its production on smaller gemstones and technical quality diamonds, and the latter category satisfies over 99% of the world demand for such products.
But even taking into account the progress achieved recently, the technology of producing synthetic diamonds of jewelry quality of a larger size has not yet advanced so much that the industry could afford to significantly reduce the prices of natural diamonds. Although synthetic rubies, emeralds and sapphires can be sold at a discount of up to 90% or more compared to natural equivalents, synthetic diamonds of higher quality can only be traded at a discount of about 2-20% (see table 2).
There is a great opportunity to expand this interval, and I expect this to happen. As the technology for the production of synthetic diamonds continues to evolve, I consider the gradual increase in production volumes and price reduction an inevitable process - the key word is "incremental growth" - because the high barriers that exist in the industry to enter the market, due to high capital investments and costs On scientific research will limit the pace of quality improvement and capacity expansion.
Now, the driving force behind the growth in demand for synthetic diamonds of jewelry quality is almost exclusively customers, concerned with environmental and ethical issues, and to a lesser extent - the generation of the third millennium, which sees a "futurological" attraction in synthetic stones; These customers buy online. I see the greatest potential for the industry in buyers who are indifferent to diamonds, which can be persuaded by relatively low prices, if access to the product is quite convenient.
From my point of view, the prices for synthetic diamonds are still not attractive enough for the persuasion of an indifferent customer, and this product is not sufficiently available for an e-shop buyer who is not showing activity. Until there is at least one showcase devoted to synthetic diamonds in national jewelry chains and department stores, coverage with synthetic diamonds may be limited - it will be such as coverage at some novelty.
http://www.paulzimnisky.com/what-it-will-take-for-the-synthetic-diamond-industry-to-be-un-successful
The difficulty is that at present technology is too expensive for many industry participants. But as this technology develops, it becomes more and more accessible and widespread; It's only a matter of time, when the recognition of synthetic and natural diamonds will cease to be a problem.
Personally, I'm more concerned with what will happen after solving the identification problem, and here I'm most concerned with what, in my opinion, will become the two main drivers of the synthetic diamonds industry when it moves forward: 1) price formation and 2) distribution.
An interesting indicator for the market of synthetic diamonds is the precious stones market: rubies, emeralds and sapphires. The market for synthetic analogues for these precious stones has strengthened several years ago, and now it is more than the market of natural stones. This was hampered in the form of trade restrictions and created other difficulties that led to a reduction in supply and price increases. In recent years, the volume of production of these synthetic gemstones has grown, and the product has been accepted by the industry of the production and marketing of jewelry. As a result, there was a favorable difference in prices for synthetic and natural stones, and a good sales channel is provided by the largest national retailers.
Currently, the situation in the diamond-diamond industry is opposite: the position of the diamond mining industry is relatively stable, although there has been a trend to reduce supply since the peak of production in the mid-2000s was reached and there is a non-existent sales channel in retail trade Synthetic diamonds. According to my estimates, synthetic jewelery quality diamonds currently make up only about 1-2% of the total diamond jewelry market (for example, 1-2 of every 100 carats sold are synthetic diamonds, see table 1).
Although the technology of producing synthetic diamonds has existed for almost 65 years, until recently there were no colorless synthetic diamonds weighing 1 carat and above, suitable for the wedding ring. For example, in early 2013, Gemesis, now known as Pure Grown Diamonds, produced a 1.29 carat synthetic diamond, E color, VVS2 purity, emerald cut, which at that time was declared "the world's largest whiteest grown in Lab diamond. " Traditionally, the synthetic diamonds industry concentrates its production on smaller gemstones and technical quality diamonds, and the latter category satisfies over 99% of the world demand for such products.
But even taking into account the progress achieved recently, the technology of producing synthetic diamonds of jewelry quality of a larger size has not yet advanced so much that the industry could afford to significantly reduce the prices of natural diamonds. Although synthetic rubies, emeralds and sapphires can be sold at a discount of up to 90% or more compared to natural equivalents, synthetic diamonds of higher quality can only be traded at a discount of about 2-20% (see table 2).
There is a great opportunity to expand this interval, and I expect this to happen. As the technology for the production of synthetic diamonds continues to evolve, I consider the gradual increase in production volumes and price reduction an inevitable process - the key word is "incremental growth" - because the high barriers that exist in the industry to enter the market, due to high capital investments and costs On scientific research will limit the pace of quality improvement and capacity expansion.
Now, the driving force behind the growth in demand for synthetic diamonds of jewelry quality is almost exclusively customers, concerned with environmental and ethical issues, and to a lesser extent - the generation of the third millennium, which sees a "futurological" attraction in synthetic stones; These customers buy online. I see the greatest potential for the industry in buyers who are indifferent to diamonds, which can be persuaded by relatively low prices, if access to the product is quite convenient.
From my point of view, the prices for synthetic diamonds are still not attractive enough for the persuasion of an indifferent customer, and this product is not sufficiently available for an e-shop buyer who is not showing activity. Until there is at least one showcase devoted to synthetic diamonds in national jewelry chains and department stores, coverage with synthetic diamonds may be limited - it will be such as coverage at some novelty.
http://www.paulzimnisky.com/what-it-will-take-for-the-synthetic-diamond-industry-to-be-un-successful
Since De Beers raised its prices, the market fell
Buyers of rough diamonds leave precious stones on the table, prompting De Beers, the world's largest diamond producer, to make concessions in prices.
After 30 percent of the diamonds remained unsold on the March site of this division of Anglo American Plc, it unexpectedly cut prices by almost 3 percent. And in February the company claimed that it expects price growth this year.
This step back is a signal that Philippe Mellier, CEO of De Beers, has gone too far with his program, which turned four years old, aimed at increasing profits due to the fact that from a select group of buyers, companies require more money. This model is under pressure, since sightholders from among the well-known customers say that they pay for rough diamonds more than they can get when selling it.
"People say that they are enough," said Nurit Rothmann, a diamond-based broker in Israel. "It's impossible to buy and incur losses, just to be in a VIP club."
De Beers declined to comment.
For almost one hundred years, being one of De Beers customers meant taking a place in the top ranks of the list of leading companies in the industry and getting a decent profit. De Beers sold rough diamonds below the market price, and in response to this sightholders were asked to buy all the stones they were offered at the asking price. The refusal was treated with disapproval and the best customers were encouraged sometimes with a gift - a big discount for large diamonds from the "exclusive" category.
Mechanical Engineer
This model ceased to exist in 2011 with the advent of Mélier. Being a mechanical engineer, he spent most of his career working with cars and trains, and more recently was the head of the transport division of Alstom SA.
He changed the strategy of De Beers, raising prices, and was more tolerant when buyers refused any stones. This new model was based on the fact that if all diamonds were sold out, this would mean that the company does not take enough from the buyers. The company also agreed in 2011 to buy out a 40 percent stake in the Oppenheimer family in the diamond mining unit for $ 5.1 billion.
"They needed someone like Melee, who came from a completely different industry who looked at the business with an unbiased view and said," Look, guys, the revenues we get are not enough, "said Kieron Hodgson, an analyst from London's Charles Stanley & Co.
Increase of profits
This strategy worked. Under the direction of Melier, De Beers nearly tripled its operating profit to $ 1.36 billion last year, narrowing the gap between its price for rough diamonds and the price in the secondary market for cash.
As a result, Anglo benefited, as in 2014 De Beers sales increased 11 percent to $ 7.1 billion. This unit worked best, providing more than 27 percent of the proceeds of this London-based mining corporation.
While this has increased Anglo's revenues, the largest industry participants from Antwerp and Tel Aviv receive little added value from what are sightholders. Against the backdrop of growing pessimism about demand this year, De Beers could not sell 30 percent of the stones offered on its March website, according to the Rapaport trade publication.
"De Beers has behaved too aggressively," said Anish Aggarwal, a partner with Antwerp-based Gemdax, an industry consultancy. "It is impossible to constantly assign prices higher than market prices and in spite of the main provisions of supply and demand, and they have done this for at least three quarters already."
Prices for diamonds
Since De Beers raised its prices, the market fell. Prices for rough diamonds in the first quarter decreased by 1.2 percent, according to the UK-based WWW International Diamond Consultants, after they sank by 6.9 percent in the last three months of 2014, which was the biggest decline in the period Over two years.
Weak sales and price declines also came on the back of a credit deficit after the decision of the KBC Groep NV group last year to process precious stones in the Belgian port city.
"Income this year will inevitably be lower," said Hodgson from Charles Stanley. - I think Anglo has already accepted this, but have the sightholders reconciled themselves? Probably not. "
De Beers said that in April, it reduced production due to a drop in demand.
This company, which produces about a third of the world's diamonds, sells gemstones on "sites", which are held 10 times a year in Botswana, where it manages the largest mines. Each buyer, including representatives of Graff Diamonds Corp. And Tiffany & Co., a box containing plastic bags containing precious stones is provided.
http://www.bloomberg.com/news/articles/2015-05-12/vip-diamond-buyers-resist-de-beers-pricing-that-boosted-profits
After 30 percent of the diamonds remained unsold on the March site of this division of Anglo American Plc, it unexpectedly cut prices by almost 3 percent. And in February the company claimed that it expects price growth this year.
This step back is a signal that Philippe Mellier, CEO of De Beers, has gone too far with his program, which turned four years old, aimed at increasing profits due to the fact that from a select group of buyers, companies require more money. This model is under pressure, since sightholders from among the well-known customers say that they pay for rough diamonds more than they can get when selling it.
"People say that they are enough," said Nurit Rothmann, a diamond-based broker in Israel. "It's impossible to buy and incur losses, just to be in a VIP club."
De Beers declined to comment.
For almost one hundred years, being one of De Beers customers meant taking a place in the top ranks of the list of leading companies in the industry and getting a decent profit. De Beers sold rough diamonds below the market price, and in response to this sightholders were asked to buy all the stones they were offered at the asking price. The refusal was treated with disapproval and the best customers were encouraged sometimes with a gift - a big discount for large diamonds from the "exclusive" category.
Mechanical Engineer
This model ceased to exist in 2011 with the advent of Mélier. Being a mechanical engineer, he spent most of his career working with cars and trains, and more recently was the head of the transport division of Alstom SA.
He changed the strategy of De Beers, raising prices, and was more tolerant when buyers refused any stones. This new model was based on the fact that if all diamonds were sold out, this would mean that the company does not take enough from the buyers. The company also agreed in 2011 to buy out a 40 percent stake in the Oppenheimer family in the diamond mining unit for $ 5.1 billion.
"They needed someone like Melee, who came from a completely different industry who looked at the business with an unbiased view and said," Look, guys, the revenues we get are not enough, "said Kieron Hodgson, an analyst from London's Charles Stanley & Co.
Increase of profits
This strategy worked. Under the direction of Melier, De Beers nearly tripled its operating profit to $ 1.36 billion last year, narrowing the gap between its price for rough diamonds and the price in the secondary market for cash.
As a result, Anglo benefited, as in 2014 De Beers sales increased 11 percent to $ 7.1 billion. This unit worked best, providing more than 27 percent of the proceeds of this London-based mining corporation.
While this has increased Anglo's revenues, the largest industry participants from Antwerp and Tel Aviv receive little added value from what are sightholders. Against the backdrop of growing pessimism about demand this year, De Beers could not sell 30 percent of the stones offered on its March website, according to the Rapaport trade publication.
"De Beers has behaved too aggressively," said Anish Aggarwal, a partner with Antwerp-based Gemdax, an industry consultancy. "It is impossible to constantly assign prices higher than market prices and in spite of the main provisions of supply and demand, and they have done this for at least three quarters already."
Prices for diamonds
Since De Beers raised its prices, the market fell. Prices for rough diamonds in the first quarter decreased by 1.2 percent, according to the UK-based WWW International Diamond Consultants, after they sank by 6.9 percent in the last three months of 2014, which was the biggest decline in the period Over two years.
Weak sales and price declines also came on the back of a credit deficit after the decision of the KBC Groep NV group last year to process precious stones in the Belgian port city.
"Income this year will inevitably be lower," said Hodgson from Charles Stanley. - I think Anglo has already accepted this, but have the sightholders reconciled themselves? Probably not. "
De Beers said that in April, it reduced production due to a drop in demand.
This company, which produces about a third of the world's diamonds, sells gemstones on "sites", which are held 10 times a year in Botswana, where it manages the largest mines. Each buyer, including representatives of Graff Diamonds Corp. And Tiffany & Co., a box containing plastic bags containing precious stones is provided.
http://www.bloomberg.com/news/articles/2015-05-12/vip-diamond-buyers-resist-de-beers-pricing-that-boosted-profits
US is projected to retain its market share until 2018, despite continued growth in China and India
There are growing expectations associated with the opening exhibitions in Las Vegas. Various diamond and jewelry trade events that take place every year at the end of May tend to signal a mood in a very important market, which is the United States. And these signals have their influence on all aspects of the distribution chain of diamonds and diamonds.
According to many, in the trade in diamonds at the exhibitions this year is not expected to boom. Nevertheless, these exhibitions are expected to restore some confidence in the trade. After all, in the US, demand for diamonds remained stable in a weak global market in 2014-15.
This should not be taken lightly, given that the United States accounted, by some estimates, for 45 percent of the global demand for diamond jewelry in 2014, as reported by De Beers. More importantly, the US is projected to retain its market share until 2018, despite continued growth in China and India.
The mood in the diamond market has experienced a decline as these emerging markets have begun to experience increasing difficulties this year and in the past. While growth in China stimulated the growth of the diamond industry in previous years, its apparent slowdown naturally caused an industry decline. In this regard, the trade again turned to the US for support. Being basically a typical mature market, the US tends to remain fairly constant, showing not the best results in good times and demonstrating strong performance in weak market conditions.
In truth, there remain some questions about the state of the diamond and jewelry market in the United States. While the positive reports coming from within the industry were largely sporadic, reports from the retail sector were mixed. Of course, Christmas was disappointing, and government data show that jewelry sales have been consistently falling, falling below the levels of the previous year each month since October
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52365&ArticleTitle=Dealing%2bwith%2bVegas
According to many, in the trade in diamonds at the exhibitions this year is not expected to boom. Nevertheless, these exhibitions are expected to restore some confidence in the trade. After all, in the US, demand for diamonds remained stable in a weak global market in 2014-15.
This should not be taken lightly, given that the United States accounted, by some estimates, for 45 percent of the global demand for diamond jewelry in 2014, as reported by De Beers. More importantly, the US is projected to retain its market share until 2018, despite continued growth in China and India.
The mood in the diamond market has experienced a decline as these emerging markets have begun to experience increasing difficulties this year and in the past. While growth in China stimulated the growth of the diamond industry in previous years, its apparent slowdown naturally caused an industry decline. In this regard, the trade again turned to the US for support. Being basically a typical mature market, the US tends to remain fairly constant, showing not the best results in good times and demonstrating strong performance in weak market conditions.
In truth, there remain some questions about the state of the diamond and jewelry market in the United States. While the positive reports coming from within the industry were largely sporadic, reports from the retail sector were mixed. Of course, Christmas was disappointing, and government data show that jewelry sales have been consistently falling, falling below the levels of the previous year each month since October
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52365&ArticleTitle=Dealing%2bwith%2bVegas
New Delhi in such circumstances is not going to spoil the reputation of the industry because of a few lousy sheep
Leading banking organization of India, as they say in the corridors of power in Delhi, resolutely intends to collect in court the lost money of the nationalized banks of India, and even set a deadline for this.
Raghuram Rajan, the head of the Reserve Bank of India, based in Mumbai, who is distinguished by his courteous manner, drew the Prime Minister's office to this, because he believes that this is the best way to achieve some "effective measures" In resolving the issue of the 10 largest fraudulent actions against the banks of India. Interestingly, all these institutions that do not fulfill their obligations are well-known real estate, media and diamond-diamond companies, they are all investigated by the Central Investigation Bureau (CBI), the main investigative department of the country.
Rajan, who is supported by the Enforcement Directorate (ED) and the Directorate of Revenue Intelligence (DRI), knows that non-payers will hide in their expensive shelters under the guise of laws and avoid full payment. But Rajan can not allow banks to reduce the rate of recovery in court of the lost, so as not to allow fraudsters to get off the hook.
The lost sums of money are huge, about Rs225 billion, almost as much as New Delhi hopes to receive from the sale of a 10 percent stake in Calcutta-based coal company Coal India, or money that the state oil and gas corporation Oil and Natural Gas Corporation Limited (ONGC ) Holds as a reserve for international investment in hydrocarbon projects.
All these large-scale frauds occurred in the last decade, thus causing a huge increase in non-performing assets (NPA), amounting to Rs2605.31 billion for PSU (public sector) banks in December last year. The worry is that these leading non-performing companies - take the first 30 on this list - account for slightly more than a third of these bad loans.
The Prime Minister's office, delighted by Rajan's active work on closing the cases, asked the Financial Services Department in the Ministry of Finance to apply for protection of rights to Ajit Kumar Seth, a member of the Cabinet of Ministers.
It is well known that Seth advocates the initiation of structural changes necessary to inform about fraud and establish a mechanism for coordinating and prosecuting large-scale banking fraud. Seth was at the forefront of the recent measures taken by the Prime Minister's Office to establish a high-level committee to develop standard working procedures that will be followed by all departments to form a sound anti-fraud mechanism in the banking sector.
These measures were taken after the prime minister's office saw that banks were not very cooperative in providing data relating to bad loans and that in 2014 it was the All India Bank Employees Association (AIBEA) that provided A list of those who are not fulfilling obligations, to the media, to emphasize what they call a deep concern among all PSU banks.
Rajan hopes to return, if not all, then some of the lost money. He told the Prime Minister's office the names of several companies: Winsome Diamond and Jewelery, Zoom Developers, Tiwari Group, Surya Vinayak Industries, Deccan Chronicle Holdings, First Leasing Company of India, Biolor Industries, Surya Pharmaceuticals, Prime Impex & Prime Pulses and Shivraj Puri.
Among the first in the list is the airline Kingfisher Airlines, which already said New Delhi (understand - to the Reserve Bank of India) that it is not able to pay Rs70 billion, which it owes to various banks and corporate structures. To solve the mystery Kingfisher Rajan will have to do something unexpected. Reports of Kingfisher - perhaps because of the girls in her calendars, the cricket players and parties with hip-hop music - often appeared in the media; The publisher even published a book about Vijay Mallya, once called The King of Good Times.
But it is reliably known that the Prime Minister's Office intends to investigate the cases of others, especially the second largest unscrupulous bank borrower in the country. And this is because there is enough suspicion that there was a secret conspiracy to default to Indian PSU banks for a colossal sum of Rs65 mdrd and for the amount of money withdrawn from India or directed to other projects.
The Prime Minister's Office and the Ministry of Finance are unanimous in the opinion that this company - the Winsome Group engaged in diamond trade - has defiled the industry that has been a source of pride in the country for the last two decades, and has also brought India international recognition. Experts from all over the world said that New Delhi and Beijing are the future stars of world trade in tapeworms. New Delhi in such circumstances is not going to spoil the reputation of the industry because of a few lousy sheep.
Winsome has accumulated non-payments by approximately Rs65.81 billion in loans from a consortium of 15 public sector banks, these funds were divided between three companies of the group: Winsome Diamond & Jewelers (Rs43.66 billion), Forever Precious Diamond and Jewelry (Rs19,32 Billion) and Suraj Diamonds (Rs2.83).
The group repeatedly ignored the notifications sent by banks, thereby actually declaring itself a malicious defaulter, and finally stated that this loan is a bad loan. The Central Vigilance Commission (CVC) referred the case to the CBR for criminal investigation.
Jatin Mehta, founder of Winsome, claims that his gold buyers - most of them with common property - do not fulfill their obligations in the UAE, because they suffered a loss of $ 1 billion in trading in derivative financial instruments and goods.
But no one in India believes its history, especially after the Prime Minister's office gathered evidence on how banks, customs and financial regulators "deliberately overlooked" Winsome documents filed over time. Worse still, the Central Bureau of Investigation and the Prime Minister's Office have evidence that companies called Winsome by its international distributors were in fact units for money laundering - firms registered in the "tax haven" that belonged to Mehta and His family. The CBR also has evidence that distributors did not have any collective ability to lose a billion dollars, as stated by Winsome. The main investigative department of the country is clear, That Winsome could not provide such a large loan to its distributors. Worse still, she probably did not ship gold, as claimed.
http://www.dnaindia.com/analysis/column-rbi-takes-aim-at-defaulters-2083869
Raghuram Rajan, the head of the Reserve Bank of India, based in Mumbai, who is distinguished by his courteous manner, drew the Prime Minister's office to this, because he believes that this is the best way to achieve some "effective measures" In resolving the issue of the 10 largest fraudulent actions against the banks of India. Interestingly, all these institutions that do not fulfill their obligations are well-known real estate, media and diamond-diamond companies, they are all investigated by the Central Investigation Bureau (CBI), the main investigative department of the country.
Rajan, who is supported by the Enforcement Directorate (ED) and the Directorate of Revenue Intelligence (DRI), knows that non-payers will hide in their expensive shelters under the guise of laws and avoid full payment. But Rajan can not allow banks to reduce the rate of recovery in court of the lost, so as not to allow fraudsters to get off the hook.
The lost sums of money are huge, about Rs225 billion, almost as much as New Delhi hopes to receive from the sale of a 10 percent stake in Calcutta-based coal company Coal India, or money that the state oil and gas corporation Oil and Natural Gas Corporation Limited (ONGC ) Holds as a reserve for international investment in hydrocarbon projects.
All these large-scale frauds occurred in the last decade, thus causing a huge increase in non-performing assets (NPA), amounting to Rs2605.31 billion for PSU (public sector) banks in December last year. The worry is that these leading non-performing companies - take the first 30 on this list - account for slightly more than a third of these bad loans.
The Prime Minister's office, delighted by Rajan's active work on closing the cases, asked the Financial Services Department in the Ministry of Finance to apply for protection of rights to Ajit Kumar Seth, a member of the Cabinet of Ministers.
It is well known that Seth advocates the initiation of structural changes necessary to inform about fraud and establish a mechanism for coordinating and prosecuting large-scale banking fraud. Seth was at the forefront of the recent measures taken by the Prime Minister's Office to establish a high-level committee to develop standard working procedures that will be followed by all departments to form a sound anti-fraud mechanism in the banking sector.
These measures were taken after the prime minister's office saw that banks were not very cooperative in providing data relating to bad loans and that in 2014 it was the All India Bank Employees Association (AIBEA) that provided A list of those who are not fulfilling obligations, to the media, to emphasize what they call a deep concern among all PSU banks.
Rajan hopes to return, if not all, then some of the lost money. He told the Prime Minister's office the names of several companies: Winsome Diamond and Jewelery, Zoom Developers, Tiwari Group, Surya Vinayak Industries, Deccan Chronicle Holdings, First Leasing Company of India, Biolor Industries, Surya Pharmaceuticals, Prime Impex & Prime Pulses and Shivraj Puri.
Among the first in the list is the airline Kingfisher Airlines, which already said New Delhi (understand - to the Reserve Bank of India) that it is not able to pay Rs70 billion, which it owes to various banks and corporate structures. To solve the mystery Kingfisher Rajan will have to do something unexpected. Reports of Kingfisher - perhaps because of the girls in her calendars, the cricket players and parties with hip-hop music - often appeared in the media; The publisher even published a book about Vijay Mallya, once called The King of Good Times.
But it is reliably known that the Prime Minister's Office intends to investigate the cases of others, especially the second largest unscrupulous bank borrower in the country. And this is because there is enough suspicion that there was a secret conspiracy to default to Indian PSU banks for a colossal sum of Rs65 mdrd and for the amount of money withdrawn from India or directed to other projects.
The Prime Minister's Office and the Ministry of Finance are unanimous in the opinion that this company - the Winsome Group engaged in diamond trade - has defiled the industry that has been a source of pride in the country for the last two decades, and has also brought India international recognition. Experts from all over the world said that New Delhi and Beijing are the future stars of world trade in tapeworms. New Delhi in such circumstances is not going to spoil the reputation of the industry because of a few lousy sheep.
Winsome has accumulated non-payments by approximately Rs65.81 billion in loans from a consortium of 15 public sector banks, these funds were divided between three companies of the group: Winsome Diamond & Jewelers (Rs43.66 billion), Forever Precious Diamond and Jewelry (Rs19,32 Billion) and Suraj Diamonds (Rs2.83).
The group repeatedly ignored the notifications sent by banks, thereby actually declaring itself a malicious defaulter, and finally stated that this loan is a bad loan. The Central Vigilance Commission (CVC) referred the case to the CBR for criminal investigation.
Jatin Mehta, founder of Winsome, claims that his gold buyers - most of them with common property - do not fulfill their obligations in the UAE, because they suffered a loss of $ 1 billion in trading in derivative financial instruments and goods.
But no one in India believes its history, especially after the Prime Minister's office gathered evidence on how banks, customs and financial regulators "deliberately overlooked" Winsome documents filed over time. Worse still, the Central Bureau of Investigation and the Prime Minister's Office have evidence that companies called Winsome by its international distributors were in fact units for money laundering - firms registered in the "tax haven" that belonged to Mehta and His family. The CBR also has evidence that distributors did not have any collective ability to lose a billion dollars, as stated by Winsome. The main investigative department of the country is clear, That Winsome could not provide such a large loan to its distributors. Worse still, she probably did not ship gold, as claimed.
http://www.dnaindia.com/analysis/column-rbi-takes-aim-at-defaulters-2083869
I understand that we are nothing but a float swinging on the strong waves of a troubled sea
Thinking about the undercurrents affecting our business these days, I understand that we are nothing but a float swinging on the strong waves of a troubled sea. In reality, we have issues that are characteristic of business, but the economic, technological and political unrest that is taking place around the world makes it very difficult for us to achieve clarity on the issue where we are moving.
Nevertheless, some events provide an opportunity to take a closer look, even if the results are not fully felt for several years. One of the questions, which I wrote earlier, is the increase in the share of synthetic diamonds (man-made diamonds, MMD) in trade. In my opinion, there will be three stages when MMD will reach turning points, moments when their presence on the market forces us to adapt to them. I'll outline the tipping point number 1 and describe the other two in the following blogs.
First, there are a few indisputable facts concerning where we are at the moment. Production of synthetic diamonds continues to grow. I have long said that a large percentage of consumers will not have problems in buying MMD, and this seems to be true. Now, retailers are beginning to use MMD as alternative low-cost "diamonds." The equipment is improved, and the cost of equipment is reduced. Now it takes only 18 months or less to fully depreciate the cost of the equipment. (I'm talking about the process of chemical vapor deposition, CVD, but this also applies to the process occurring at high temperature under high pressure, HPHT). And we can only expect further decline in value.
http://janosconsultants.blogspot.be/
Nevertheless, some events provide an opportunity to take a closer look, even if the results are not fully felt for several years. One of the questions, which I wrote earlier, is the increase in the share of synthetic diamonds (man-made diamonds, MMD) in trade. In my opinion, there will be three stages when MMD will reach turning points, moments when their presence on the market forces us to adapt to them. I'll outline the tipping point number 1 and describe the other two in the following blogs.
First, there are a few indisputable facts concerning where we are at the moment. Production of synthetic diamonds continues to grow. I have long said that a large percentage of consumers will not have problems in buying MMD, and this seems to be true. Now, retailers are beginning to use MMD as alternative low-cost "diamonds." The equipment is improved, and the cost of equipment is reduced. Now it takes only 18 months or less to fully depreciate the cost of the equipment. (I'm talking about the process of chemical vapor deposition, CVD, but this also applies to the process occurring at high temperature under high pressure, HPHT). And we can only expect further decline in value.
http://janosconsultants.blogspot.be/
Sales of jewelry and watches in the US through all channels in May grew by only 0.4 percent year on year, to 7.1 billion, according to preliminary government estimates. According to Rapaport News, sales this month rose slightly - by 0.5 percent to $ 6.3 billion, and sales of watches fell by 0.7 percent to $ 831 million. Even if the numbers, basically, remained unchanged compared to May 2014, the slightest increase interrupted the seven-month period of decline in sales in this sector.
Sales of jewelry and watches in the first five months of this year fell 0.6 percent year-on-year to $ 28.7 billion, according to Rapaport News. The sales of jewelry fell 0.5 percent to $ 25.4 billion, and the sales of watches had a stronger impact on the sector, falling by 1.9 percent to $ 3.4 billion.
In addition, sales only in specialized jewelry stores in the US for the first four months showed a more serious decline, falling by 4.7 percent year on year to $ 8.5 billion. The general parameters for the month are planned to be published on July 14.
Updated data on sales for May in US department stores continue to show a decline - a decline of 3.2 percent year on year to $ 13.6 billion. But low consumer spending was also noted in both retail and food products, with the exception of automotive and automotive parts, as sales were unchanged at $ 364.03 billion. The volume of retail sales increased by 2 percent. The volume of retail sales from trays and in the markets increased by 6 percent to $ 37.681 billion.
According to Lindsey M. Piegza, chief economist at Stifel, consumer spending in May rose higher than expected, an increase of 0.9 percent on a monthly basis, the highest in almost six years. "For three months in terms of the year, consumer spending grew by 4 percent, which is equivalent to the growth rate at the end of last year," she said in an explanatory note for clients.
http://rough-polished.com/ru/expertise/www.diamonds.net/News/NewsItem.aspx?ArticleID=52681&ArticleTitle=U.S.%2bJewelry%252c%2bWatch%2bSales%2bFlat%2bin%2bMay%2b
Sales of jewelry and watches in the first five months of this year fell 0.6 percent year-on-year to $ 28.7 billion, according to Rapaport News. The sales of jewelry fell 0.5 percent to $ 25.4 billion, and the sales of watches had a stronger impact on the sector, falling by 1.9 percent to $ 3.4 billion.
In addition, sales only in specialized jewelry stores in the US for the first four months showed a more serious decline, falling by 4.7 percent year on year to $ 8.5 billion. The general parameters for the month are planned to be published on July 14.
Updated data on sales for May in US department stores continue to show a decline - a decline of 3.2 percent year on year to $ 13.6 billion. But low consumer spending was also noted in both retail and food products, with the exception of automotive and automotive parts, as sales were unchanged at $ 364.03 billion. The volume of retail sales increased by 2 percent. The volume of retail sales from trays and in the markets increased by 6 percent to $ 37.681 billion.
According to Lindsey M. Piegza, chief economist at Stifel, consumer spending in May rose higher than expected, an increase of 0.9 percent on a monthly basis, the highest in almost six years. "For three months in terms of the year, consumer spending grew by 4 percent, which is equivalent to the growth rate at the end of last year," she said in an explanatory note for clients.
http://rough-polished.com/ru/expertise/www.diamonds.net/News/NewsItem.aspx?ArticleID=52681&ArticleTitle=U.S.%2bJewelry%252c%2bWatch%2bSales%2bFlat%2bin%2bMay%2b
De Beers' decision to use the winning slogan "Brilliant is Forever" for its own initiative in retailing Forevermark
The closure of the Indian diamond manufacturer and the large debts that it has left are probably the most important news of this week, and then there is a trade exhibition in Hong Kong.
Tens of millions of diamond debts
The closed diamond manufacturer, which also had an operating office in Antwerp, left debts that are estimated at tens of millions of dollars to banks and rough diamond suppliers, according to market reports.
The massive debts left by a large, failed player in the middle part of the diamond pipeline are always troubling the diamond and diamond industry, and concerns are even growing in connection with the beginning of the most recent crisis. Large debts left by closing companies mean that those who owe money may have difficulty in executing their own payments, which can cause a chain reaction of failures.
Such failures in business affect the entire diamond industry and give rise to even more fears about the future. In addition to the general concern that companies may not fulfill their financial obligations, and the affected companies in particular, there is a constant concern that the lost money will not be restored. The fear is that banks will reduce the allocation of their diamond and diamond industry funds to the amount of lost money. By and large, if banks lend billions of dollars annually, tens of millions can be a small amount, but every dollar is important, and no one wants to face reduction in support by banks.
Closure and bankruptcy
In recent weeks, there have been reports of medium-sized and even medium-sized companies closing their production and leaving the business. This happens mainly in India; But there were a number of additional closures, including bankruptcies, in Tel Aviv and Antwerp. Some of the closed companies had debts to suppliers.
The recent major closure in India was not only expected, it also led to the fact that diamond suppliers began to exercise caution. This is explained by the fact that this company, in general, has debts to the suppliers of diamonds. Although diamond mining companies sell only on account of immediate payment, suppliers in the secondary market, traders and buyers first-hand sell, mainly on credit.
The loan is the engine that provides the movement of diamond sales volumes from direct suppliers to the secondary market. The interest for the loan is the source of most of the profits currently in the middle of the diamond pipeline. Due to recent business closures and fears that payments for diamonds will not be made, the past and future credit transactions suffer.
Issues related to credit
This raises the question: What should suppliers do in the secondary market? Some transactions will be cash (immediate payment). Some loans will still be provided, although for shorter periods. There is a high probability that in some cases traders will simply refuse to buy diamonds from diamond mining companies in order to completely avoid the risk of granting a loan. Their concern is based not only on the ability to pay, but also on the information that a growing number of sets of diamonds from which it is impossible to obtain profitable diamonds. This replenishes already large reserves.
From the point of view of the diamond manufacturer, if the price of diamonds is too high, then the diamonds run off and there is a financial risk of selling to other diamond producers - why should they buy diamonds first? This concern may lead to an increase in the number of returns to the main diamond mining companies, if they do not significantly reduce the supply.
Hong Kong
The Hong Kong Jewelery & Gem Fair, held in Hong Kong in June last week, opened with the general unhappiness of wholesalers who sell diamonds. The exhibition was attended by over 2,200 companies from 45 countries and regions. Tens of thousands of visitors came at a time that is considered a recession in this region.
This important exhibition, when it is organized in June, is usually not active, and this year is particularly sluggish. Traders reported that there was less business compared to the June exhibition last year, although it did not become a complete collapse.
Demand from mainland China was below expectations. The business itself in Hong Kong is a combination of lower visitor spending from mainland China and the growing spending of investors in the stock market, who fork out and want to enjoy their profits.
This determines the greater part of the business that took place at the Hong Kong Fair. She began sluggishly, at the beginning of her there were several deals. With such low forecasts, the general feeling was: "We got what we expected, and maybe a little more," as one of the fair participants said.
Fair Deals
Most of the major buyers were not at the exhibition. The presence of smaller Chinese retailers gave a fairly large number of transactions, although their amounts were smaller compared to last year.
At first, buyers offered low prices, but the exhibitors kept high prices, especially in those areas where there was a shortage recently, for example, diamonds weighing 1 carat VS-SI quality. Buyers who placed pre-orders had to pay the price that wholesalers demanded. The deficit of diamonds weighing 1 carat is clearly due to a decrease in the production of diamonds. Moreover, since this is a compromise between size and price, anything larger is beyond the budget of consumers today, and 1 carat still remains an acceptable size for wedding rings.
In general, the price of a round cut diamond weighing 1 carat slightly increased in the last two months. The most popular at the exhibition were diamonds of 1 carat quality VS and SI of all colors and 0.10 carats of all quality categories, colors, as well as pointers, especially 0.25 carats of purity VS-SI.
It was reported a very small number of transactions for large expensive stones. The greater demand for stones weighing 2 carats and above accounted for the medium and low categories of color and quality.
Traders fantasy diamonds complained that there were too many participants offering fancy yellow diamonds, but they managed to keep the prices of brilliant (Vivid) and saturated (Intense) brilliants yellow at a high level. There were difficulties in selling fancy yellow diamonds of all categories of quality and shades, if the stones were not flawless.
Many exhibitors expressed their dissatisfaction with the exhibitions in general and said that they could probably receive the same amount of sales or even more, being in their offices. It is not clear whether this is a long-term conclusion or only a feeling that has arisen from the current weak market. Time will tell if they will refrain from participating in future fairs, or even skip the forthcoming exhibitions, and will submit applications for the stand, when the situation on the market improves.
Caution in the diamond market
After a limited number of returns on the last De Beers site, which is large for this period, and in the light of recent business disruptions at large diamond and diamond centers, the rough diamond market continues to be cautious. Purchases at tenders are very concentrated and at reasonable prices, all this is done to ensure that diamond producers remain in profit and concentrated on a product with real demand.
Since polished prices seem to have stabilized, the current low prices reflect the lower cost of retained diamonds' stocks, made of expensive diamonds. Diamond manufacturers learn to recognize that erosion of capital due to falling prices will persist for some time. They carry out the necessary regulation of management costs, overheads and prices.
Change in Demand for Diamonds
Demand in the wholesale market for diamonds is low, but stable. For some products, demand is falling, and some products are sporadically growing interest. There is still a small demand for so-called American goods - HIJ round cut diamonds and SI-I purity weighing one carat and lower. The trend in the shift in demand towards cheaper diamonds from this group is continuing, and it is expected that it will be long.
Prices are mostly stable with the end of the exhibition in Las Vegas. It is expected that they, in general, will remain at the existing level before the holiday shopping season begins.
Demand in the Far East, in India and the Arab countries of the Persian Gulf - and to some extent also in the United States - shows a contradictory trend. On the one hand, the demand for expensive goods is stable, and in some places even strengthens, and on the other hand, the demand for goods considered to be typical shifts towards cheaper products.
Brief information from the Presidential meeting
Presidents of diamond exchanges around the world held a meeting in Israel last week with the International Diamond Manufacturers Association (IDMA) to discuss pressing issues: declining profits, species marketing, declaring [synthetic diamonds] and diamonds grown in the laboratory.
As for the erosion of profits - this is the most acute issue, then diamond producers can do little about it now. Diamond companies set prices for rough diamonds, and retailers accept or reject diamond prices, leaving diamond manufacturers in front of the existing dilemma. One practical step is to support the initiative of species marketing, what the association of diamond producers is going to do - which they did. However, they nevertheless deplore De Beers' decision to use the winning slogan "Brilliant is Forever" for its own initiative in retailing Forevermark, rather than allowing it to continue to be used for species marketing.
The issue of the announcement and diamonds grown in the laboratory was touched on both in connection with reports about the mixing of synthetic diamonds with natural diamonds and in connection with the secret processing, which temporarily improves the color of the diamond.
http://www.ehudlaniado.com/home/index.php/news/entry/tackling-debts-fears-in-today-s-diamond-market
Tens of millions of diamond debts
The closed diamond manufacturer, which also had an operating office in Antwerp, left debts that are estimated at tens of millions of dollars to banks and rough diamond suppliers, according to market reports.
The massive debts left by a large, failed player in the middle part of the diamond pipeline are always troubling the diamond and diamond industry, and concerns are even growing in connection with the beginning of the most recent crisis. Large debts left by closing companies mean that those who owe money may have difficulty in executing their own payments, which can cause a chain reaction of failures.
Such failures in business affect the entire diamond industry and give rise to even more fears about the future. In addition to the general concern that companies may not fulfill their financial obligations, and the affected companies in particular, there is a constant concern that the lost money will not be restored. The fear is that banks will reduce the allocation of their diamond and diamond industry funds to the amount of lost money. By and large, if banks lend billions of dollars annually, tens of millions can be a small amount, but every dollar is important, and no one wants to face reduction in support by banks.
Closure and bankruptcy
In recent weeks, there have been reports of medium-sized and even medium-sized companies closing their production and leaving the business. This happens mainly in India; But there were a number of additional closures, including bankruptcies, in Tel Aviv and Antwerp. Some of the closed companies had debts to suppliers.
The recent major closure in India was not only expected, it also led to the fact that diamond suppliers began to exercise caution. This is explained by the fact that this company, in general, has debts to the suppliers of diamonds. Although diamond mining companies sell only on account of immediate payment, suppliers in the secondary market, traders and buyers first-hand sell, mainly on credit.
The loan is the engine that provides the movement of diamond sales volumes from direct suppliers to the secondary market. The interest for the loan is the source of most of the profits currently in the middle of the diamond pipeline. Due to recent business closures and fears that payments for diamonds will not be made, the past and future credit transactions suffer.
Issues related to credit
This raises the question: What should suppliers do in the secondary market? Some transactions will be cash (immediate payment). Some loans will still be provided, although for shorter periods. There is a high probability that in some cases traders will simply refuse to buy diamonds from diamond mining companies in order to completely avoid the risk of granting a loan. Their concern is based not only on the ability to pay, but also on the information that a growing number of sets of diamonds from which it is impossible to obtain profitable diamonds. This replenishes already large reserves.
From the point of view of the diamond manufacturer, if the price of diamonds is too high, then the diamonds run off and there is a financial risk of selling to other diamond producers - why should they buy diamonds first? This concern may lead to an increase in the number of returns to the main diamond mining companies, if they do not significantly reduce the supply.
Hong Kong
The Hong Kong Jewelery & Gem Fair, held in Hong Kong in June last week, opened with the general unhappiness of wholesalers who sell diamonds. The exhibition was attended by over 2,200 companies from 45 countries and regions. Tens of thousands of visitors came at a time that is considered a recession in this region.
This important exhibition, when it is organized in June, is usually not active, and this year is particularly sluggish. Traders reported that there was less business compared to the June exhibition last year, although it did not become a complete collapse.
Demand from mainland China was below expectations. The business itself in Hong Kong is a combination of lower visitor spending from mainland China and the growing spending of investors in the stock market, who fork out and want to enjoy their profits.
This determines the greater part of the business that took place at the Hong Kong Fair. She began sluggishly, at the beginning of her there were several deals. With such low forecasts, the general feeling was: "We got what we expected, and maybe a little more," as one of the fair participants said.
Fair Deals
Most of the major buyers were not at the exhibition. The presence of smaller Chinese retailers gave a fairly large number of transactions, although their amounts were smaller compared to last year.
At first, buyers offered low prices, but the exhibitors kept high prices, especially in those areas where there was a shortage recently, for example, diamonds weighing 1 carat VS-SI quality. Buyers who placed pre-orders had to pay the price that wholesalers demanded. The deficit of diamonds weighing 1 carat is clearly due to a decrease in the production of diamonds. Moreover, since this is a compromise between size and price, anything larger is beyond the budget of consumers today, and 1 carat still remains an acceptable size for wedding rings.
In general, the price of a round cut diamond weighing 1 carat slightly increased in the last two months. The most popular at the exhibition were diamonds of 1 carat quality VS and SI of all colors and 0.10 carats of all quality categories, colors, as well as pointers, especially 0.25 carats of purity VS-SI.
It was reported a very small number of transactions for large expensive stones. The greater demand for stones weighing 2 carats and above accounted for the medium and low categories of color and quality.
Traders fantasy diamonds complained that there were too many participants offering fancy yellow diamonds, but they managed to keep the prices of brilliant (Vivid) and saturated (Intense) brilliants yellow at a high level. There were difficulties in selling fancy yellow diamonds of all categories of quality and shades, if the stones were not flawless.
Many exhibitors expressed their dissatisfaction with the exhibitions in general and said that they could probably receive the same amount of sales or even more, being in their offices. It is not clear whether this is a long-term conclusion or only a feeling that has arisen from the current weak market. Time will tell if they will refrain from participating in future fairs, or even skip the forthcoming exhibitions, and will submit applications for the stand, when the situation on the market improves.
Caution in the diamond market
After a limited number of returns on the last De Beers site, which is large for this period, and in the light of recent business disruptions at large diamond and diamond centers, the rough diamond market continues to be cautious. Purchases at tenders are very concentrated and at reasonable prices, all this is done to ensure that diamond producers remain in profit and concentrated on a product with real demand.
Since polished prices seem to have stabilized, the current low prices reflect the lower cost of retained diamonds' stocks, made of expensive diamonds. Diamond manufacturers learn to recognize that erosion of capital due to falling prices will persist for some time. They carry out the necessary regulation of management costs, overheads and prices.
Change in Demand for Diamonds
Demand in the wholesale market for diamonds is low, but stable. For some products, demand is falling, and some products are sporadically growing interest. There is still a small demand for so-called American goods - HIJ round cut diamonds and SI-I purity weighing one carat and lower. The trend in the shift in demand towards cheaper diamonds from this group is continuing, and it is expected that it will be long.
Prices are mostly stable with the end of the exhibition in Las Vegas. It is expected that they, in general, will remain at the existing level before the holiday shopping season begins.
Demand in the Far East, in India and the Arab countries of the Persian Gulf - and to some extent also in the United States - shows a contradictory trend. On the one hand, the demand for expensive goods is stable, and in some places even strengthens, and on the other hand, the demand for goods considered to be typical shifts towards cheaper products.
Brief information from the Presidential meeting
Presidents of diamond exchanges around the world held a meeting in Israel last week with the International Diamond Manufacturers Association (IDMA) to discuss pressing issues: declining profits, species marketing, declaring [synthetic diamonds] and diamonds grown in the laboratory.
As for the erosion of profits - this is the most acute issue, then diamond producers can do little about it now. Diamond companies set prices for rough diamonds, and retailers accept or reject diamond prices, leaving diamond manufacturers in front of the existing dilemma. One practical step is to support the initiative of species marketing, what the association of diamond producers is going to do - which they did. However, they nevertheless deplore De Beers' decision to use the winning slogan "Brilliant is Forever" for its own initiative in retailing Forevermark, rather than allowing it to continue to be used for species marketing.
The issue of the announcement and diamonds grown in the laboratory was touched on both in connection with reports about the mixing of synthetic diamonds with natural diamonds and in connection with the secret processing, which temporarily improves the color of the diamond.
http://www.ehudlaniado.com/home/index.php/news/entry/tackling-debts-fears-in-today-s-diamond-market
Marketing will increase the desire of consumers to have diamonds
The presidential meeting held in Tel Aviv marked the challenges facing the diamond and diamond industry, but the issue of profitability was the most urgent. The participants of the World Federation of Diamond Bourses (WFDB) and the International Manufacturers Association (IDMA), which held this meeting, are struggling for survival, as they can not benefit from the cutting of rough diamonds.
In this regard, speakers at the three-day meeting noted that the most urgent are the following issues:
1. Lack of profit in the middle part of the diamond pipeline.
2. Reduction of bank loans for the industry and the opinion of banks about its high risk.
3. The overestimation of the characteristics of stones during certification and the temporary change in the color of diamonds.
4. Mixing of undeclared synthetic diamonds with natural diamonds.
5. An appeal to increase competition and transparency among companies serving the industry, with a special emphasis on the Rapaport price list.
Times are really difficult. Although WFDB and IDMA already have systems to solve some of these problems and are discussing other issues, the industry remains at a loss for profitability.
The clearest directive at this meeting was the call of Ernie Blom, president of WFDB, to the industry participants not to buy diamonds at a high price.
"We are our own worst enemies," Blom said at a press conference at the close. "We buy diamonds at a price at which it's impossible to make money."
Still, most of the disappointment was ironed out during this meeting. Although there have been constant calls to work with the diamond mining sector to find a solution to the profitability problem, it is unclear what the market expects from diamond producers.
Diamond companies have very clear plans for obtaining their own profit, since they must give answers to their shareholders long before they start trading. In his address to the participants of the Presidential meeting, Philippe Mellier, CEO of De Beers, tried to mitigate what he had said before a somewhat sensational statement that "we all should receive our own profits." But his softer explanations still meant the same thing. "Nobody can do business better than those who live and breathe it every day, and absolutely every diamond-diamond company in this huge industry must make its own choice about how to succeed in this new world," he said.
After all, every business - and sector, for that matter - is responsible for its own profits, as it should be.
Therefore, dealers and diamond manufacturers need to clarify their own plans for the prices of rough diamonds. What does the middle part of the diamond pipeline expect from the diamond mining sector?
In a weak market, diamond mining companies face two choices. First, they can reduce the offer in an attempt to maintain a relatively stable price for diamonds. But they will sell whatever they can, at prevailing high prices, and keep stocks (in land or in storage), if necessary, until the market returns to their diamond prices. Or they can dramatically cut prices to stimulate demand, thereby affecting prices to reflect a weakening in demand levels.
From the conclusion of the Presidential meeting it seems that the diamond production and diamond mining sectors have similar interests. Both want to maintain more or less stable prices for rough diamonds and cut supply during the current weak market.
Shmuel Schnitzer, president of the Israeli Diamond Exchange, said that a sharp decline in diamond prices would have a negative impact on the market. "What we can ask the diamond producers is to cut their supplies, although I'm not sure that they will do this for a long time," he said.
So far, diamond miners have done just this year. Rapaport estimates that De Beers diamond sales in the first half of 2015 fell by almost 28 percent year-on-year to about $ 2.5 billion. The company ALROSA, which reports data in Russian rubles, sales volumes decreased in the first quarter by 29 percent to 9 million carats, although its final figures grew due to the weakening of the currency.
Dealers in the middle of the diamond pipeline and diamond producers prefer to reduce supply and stable prices for diamonds and are afraid of sharp adjustments for two reasons: a) they are worried that a decline in diamond prices will cause a further decline in the price of diamonds, and b) a sharp reverse price movement may devalue Their existing reserves.
But the problem with the stable prices for diamonds is that the profits of the diamond producers can be further reduced if the prices for diamonds continue to fall. Shmuel Schnitzer stressed that "if the prices for diamonds remain the same as they are, and there will be a drop in prices in the Rapaport price list, we will lose even more than today." At the same time, the author of these lines, of course, hopes that any transparent and competitive diamond trade network or price list reflects the true state of the diamond and diamond market - both in good times and in difficult times.
The real situation in 2015 is that prices for diamonds keep the trend to decline. The markets of the Far East have slowed down, and the United States market is at best stable. Andrei Zharkov, the newly appointed president of ALROSA, stressed in Tel Aviv that the main problem is that there is a surplus in the supply of diamonds on the market. This means that the proposal needs to be reduced, but also that demand is weak.
The index RapNet Diamond Index (RAPI ™) for diamonds weighing 1 carat, which have been laboratory certified, are still stable in June, but RAPI indexes for diamonds of 0.30 carats, 0.40 carats and 0.50 carats fell by almost 1 percent. It seems that the rate of profit will also continue to decline.
Probably, the answer is to stimulate consumer demand, with which everyone must agree, and yes agree. Ultimately, the new generation of consumers of the third millennium makes purchases in a different way, and is currently not very attracted to buying diamonds.
In this regard, the industry is pinning its hopes on possible marketing campaigns with the aim of heating demand. Current efforts are concentrated in the framework of the World Diamond Mark, established by the World Federation of Diamond Exchanges, as well as within the possible participation of the newly established Diamond Producers Association.
But it should be noted that although species marketing will increase the desire of consumers to have diamonds, this does not necessarily mean that it will increase the profits of participants in the middle part of the diamond pipeline. As consumer demand grows and prices for diamonds increase, diamond prices will also rise.
Currently, with a reduction in supply, diamond prices do not reflect the same real situation on the market as diamonds. In such a protracted non-profit situation, the middle part of the diamond pipeline will continue to consolidate.
In order to restore the profits of diamond producers and dealers, diamond prices must fall sharply to make the diamond business again viable - both now and especially when the situation on the market again improves. When prices for rough diamonds are falling, diamond suppliers should be disciplined and keep a firm price for their diamonds. They must reassess their inventories at a lower cost of replacement, if necessary, instead of valuation at actual cost, and resume trading on an uptrend. And they must continue to refuse to buy diamonds at a high price.
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52624&ArticleTitle=The%2BBiggest%2BChallenge
In this regard, speakers at the three-day meeting noted that the most urgent are the following issues:
1. Lack of profit in the middle part of the diamond pipeline.
2. Reduction of bank loans for the industry and the opinion of banks about its high risk.
3. The overestimation of the characteristics of stones during certification and the temporary change in the color of diamonds.
4. Mixing of undeclared synthetic diamonds with natural diamonds.
5. An appeal to increase competition and transparency among companies serving the industry, with a special emphasis on the Rapaport price list.
Times are really difficult. Although WFDB and IDMA already have systems to solve some of these problems and are discussing other issues, the industry remains at a loss for profitability.
The clearest directive at this meeting was the call of Ernie Blom, president of WFDB, to the industry participants not to buy diamonds at a high price.
"We are our own worst enemies," Blom said at a press conference at the close. "We buy diamonds at a price at which it's impossible to make money."
Still, most of the disappointment was ironed out during this meeting. Although there have been constant calls to work with the diamond mining sector to find a solution to the profitability problem, it is unclear what the market expects from diamond producers.
Diamond companies have very clear plans for obtaining their own profit, since they must give answers to their shareholders long before they start trading. In his address to the participants of the Presidential meeting, Philippe Mellier, CEO of De Beers, tried to mitigate what he had said before a somewhat sensational statement that "we all should receive our own profits." But his softer explanations still meant the same thing. "Nobody can do business better than those who live and breathe it every day, and absolutely every diamond-diamond company in this huge industry must make its own choice about how to succeed in this new world," he said.
After all, every business - and sector, for that matter - is responsible for its own profits, as it should be.
Therefore, dealers and diamond manufacturers need to clarify their own plans for the prices of rough diamonds. What does the middle part of the diamond pipeline expect from the diamond mining sector?
In a weak market, diamond mining companies face two choices. First, they can reduce the offer in an attempt to maintain a relatively stable price for diamonds. But they will sell whatever they can, at prevailing high prices, and keep stocks (in land or in storage), if necessary, until the market returns to their diamond prices. Or they can dramatically cut prices to stimulate demand, thereby affecting prices to reflect a weakening in demand levels.
From the conclusion of the Presidential meeting it seems that the diamond production and diamond mining sectors have similar interests. Both want to maintain more or less stable prices for rough diamonds and cut supply during the current weak market.
Shmuel Schnitzer, president of the Israeli Diamond Exchange, said that a sharp decline in diamond prices would have a negative impact on the market. "What we can ask the diamond producers is to cut their supplies, although I'm not sure that they will do this for a long time," he said.
So far, diamond miners have done just this year. Rapaport estimates that De Beers diamond sales in the first half of 2015 fell by almost 28 percent year-on-year to about $ 2.5 billion. The company ALROSA, which reports data in Russian rubles, sales volumes decreased in the first quarter by 29 percent to 9 million carats, although its final figures grew due to the weakening of the currency.
Dealers in the middle of the diamond pipeline and diamond producers prefer to reduce supply and stable prices for diamonds and are afraid of sharp adjustments for two reasons: a) they are worried that a decline in diamond prices will cause a further decline in the price of diamonds, and b) a sharp reverse price movement may devalue Their existing reserves.
But the problem with the stable prices for diamonds is that the profits of the diamond producers can be further reduced if the prices for diamonds continue to fall. Shmuel Schnitzer stressed that "if the prices for diamonds remain the same as they are, and there will be a drop in prices in the Rapaport price list, we will lose even more than today." At the same time, the author of these lines, of course, hopes that any transparent and competitive diamond trade network or price list reflects the true state of the diamond and diamond market - both in good times and in difficult times.
The real situation in 2015 is that prices for diamonds keep the trend to decline. The markets of the Far East have slowed down, and the United States market is at best stable. Andrei Zharkov, the newly appointed president of ALROSA, stressed in Tel Aviv that the main problem is that there is a surplus in the supply of diamonds on the market. This means that the proposal needs to be reduced, but also that demand is weak.
The index RapNet Diamond Index (RAPI ™) for diamonds weighing 1 carat, which have been laboratory certified, are still stable in June, but RAPI indexes for diamonds of 0.30 carats, 0.40 carats and 0.50 carats fell by almost 1 percent. It seems that the rate of profit will also continue to decline.
Probably, the answer is to stimulate consumer demand, with which everyone must agree, and yes agree. Ultimately, the new generation of consumers of the third millennium makes purchases in a different way, and is currently not very attracted to buying diamonds.
In this regard, the industry is pinning its hopes on possible marketing campaigns with the aim of heating demand. Current efforts are concentrated in the framework of the World Diamond Mark, established by the World Federation of Diamond Exchanges, as well as within the possible participation of the newly established Diamond Producers Association.
But it should be noted that although species marketing will increase the desire of consumers to have diamonds, this does not necessarily mean that it will increase the profits of participants in the middle part of the diamond pipeline. As consumer demand grows and prices for diamonds increase, diamond prices will also rise.
Currently, with a reduction in supply, diamond prices do not reflect the same real situation on the market as diamonds. In such a protracted non-profit situation, the middle part of the diamond pipeline will continue to consolidate.
In order to restore the profits of diamond producers and dealers, diamond prices must fall sharply to make the diamond business again viable - both now and especially when the situation on the market again improves. When prices for rough diamonds are falling, diamond suppliers should be disciplined and keep a firm price for their diamonds. They must reassess their inventories at a lower cost of replacement, if necessary, instead of valuation at actual cost, and resume trading on an uptrend. And they must continue to refuse to buy diamonds at a high price.
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=52624&ArticleTitle=The%2BBiggest%2BChallenge
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