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Weak demand and a supply glut have created a perfect storm for manufacturers. But the only true solution is at the consumer level.
Indian manufacturers view the current market situation as something close to a crisis. The desperation is similar to that during last year’s deep downturn. Polished prices are falling, and sightholders are losing money on rough.
But American dealers are happier. They say there is demand from retailers, albeit not at the peak levels they saw in 2021 and early 2022. They enjoyed decent sales at the Las Vegas shows, and trading is better now than before the exhibitions. So why the discrepancy?
Roller-coaster market
Last year’s market crash resulted from a mixture of factors. Synthetics, inflation and high interest rates reduced consumer demand for natural diamonds in the US. China was extremely slow (and still is), as consumers preferred gold for investments. Strong jewelry demand in India somewhat offset this.
Those demand trends have remained broadly steady since then, save for a modest drop-off in retailers promoting synthetics in early 2024 as margins narrowed.
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