Lack Of Profitability Jeopardizing Diamond Industry

Finance and Trade
15/09/2015 09:19

Industry analyst Ehud Laniado provides a detailed examination of the polished diamond production process and, not surprisingly, finds that manufacturers' margins are close to zero, if not actually negative. "As I have said repeatedly, the fundamentals of the diamond industry must change to drive profit. The aforesaid proves that rough diamonds are not priced to allow profit for the diamond pipeline midstream. High rough diamond prices push polished diamonds to retail at a high price without assurance that consumer demand exists at that pricing level. As a result, both wholesalers and the downstream (including consumers) have been affected by the unprofitability.

"It is therefore unsurprising to hear news of another large diamond manufacturer facing closure. This event is part of a series of closures in the midstream and retail sections of the pipeline. These closures do not take place in a vacuum. They are probably partly a result of the current crisis. It is past time for a change."