Diamond industry analyst and wholesale diamond supplier Melvin Moss believes the diamond industry is heading down the same road that led to a "glut of unwanted goods" last year, and that this will soon lead to a fully-fledged buyers' market. He writes, "Total rough supply to the market in the first quarter of 2016 is estimated at 3 billion dollars. Manufacturers have purchased large quantities of rough but their purchases are not converting into a greater demand for polished diamonds. New polished diamond production from January rough sales is now entering the market and production from February rough sales will arrive at the end of April and beginning of May. All these freshly polished diamonds will enter the market at traditionally the slowest time of the calendar year. I don’t understand the rational of diamond cutters. Polished demand is not improving enough to warrant such a large gamble. Wholesalers and retailers ... are not willing to gamble; and why should they with the knowledge that manufacturers have overbought and will soon need cash? The second quarter will be a buyers’ market."
Continuing with this theme, he writes, "There is some demand for polished diamonds but only for specific items. There isn’t a demand for the full range of production. So there will inevitably be another glut of unwanted goods. De Beers and Alrosa are excited by the large volume of rough purchased in the first quarter but certainly they cannot be oblivious to the results of the Hong Kong and Basel shows. It is simple; demand does not justify the amount of goods entering the market. The mines don’t seem to get it; the manufacturers don’t seem to get it; but the banks do!" This is reference to Standard Chartered's recent decision to reduce exposure on its $2Bn in loans to diamond companies by demanding more loan protection - either insurance or 100% collateral. "Bankers are worried about diamond manufacturers." His vision for a way out of this situation is to take a positive approach, go on the offensive and create desire for diamonds rather than becoming obsessed with fending off criticism.