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Diamond Prices To Go Up in 2007
Reuters reports today that Diamond prices are set to rise in 2007 as global supply falls significantly below demand, quoting Firestone Diamonds Chief Executive Philip Kenny.
Kenny told Reuters that an imbalance had been created by diminishing stock-piles at the world's biggest producer De Beers, coupled with a shortage of new mines coming on stream.
That will mean that prices would have to rise next year, despite a softening of prices in 2006, he said.
"There is a broad consensus that there will be a shortfall in supply in 2007," "In recent years the shortfall was made up by De Beers selling down stockpiles, but now they are just selling what they mine."
He added that there were no major mines about to come into production, partly as it has been seen as a major challenge in recent years to build a mine able to make a decent return.
"It's very difficult to find an economically viable diamond mine, and a lot of suitable locations are climatically or politically difficult places to work -- like Angola or Northern Russia," Kenny said.
"The fundamentals on prices weren't the same five to 10 years ago; the price forecast was not as bullish as it is now," he added.
Kenny added that growth in demand for diamonds had historically been roughly linked to global GDP growth, around 5 percent a year.
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