Gaborone: De Beers has maintained a flat forecast for diamond jewelry sales in 2015 despite this week’s slump in financial markets, according to Mr. Paul Rowley, head of global sightholder sales, reports Rapaport News.

“One can’t ignore what’s happened on the financial markets in the past few days and weeks but we also see our product doing quite well in these times. We see diamonds in general bucking the trend a little,” he said. “As much as consumer demand won’t meet our expectations from the beginning of the year, we still feel that it will be around flat on last year – which wasn’t a bad year.”

De Beers in May estimated that global diamond jewelry sales grew 3 percent to $81 billion in 2014 but said that demand in 2015 has been affected by slower growth in China and the affect the strong U.S. dollar has on sales in non-dollar denominated markets.

The diamond miner expects a positive buying trend in the U.S. during the Christmas shopping season boosted by positive economic indicators that the product tends to follow, Rowley said. He also anticipates steady sales in China during the February Chinese New Year period as the overhang of inventory in the country is slowly being depleted.

Polished Overhang:

Rowley noted that Chinese retailers aggressively bought polished diamonds to cater for the rapid store expansion that was still taking place in the first half of 2014. “We saw a lot of those goods going to the Gemological Institute of America (GIA) for grading but we subsequently didn’t see them fully turn into consumer demand,” he explained. “The opposite has happened in 2015 as there has been a contraction at a store level and flat growth in consumer sales. So we have this overhang of polished.”

Diamond manufacturers reduced their rough buying for most of 2015 in an effort to reduce their high inventory, and De Beers sales fell 21 percent to $2.7 billion in the first half of the year. The slowdown continued at the July sight, which was valued at just $200 million and a similar low value is expected at this week’s August sale, which ends on Friday.

De Beers allowed sightholders to defer up to 75 percent of their allocated supply at the August sight in light of the weak market now taking place in Botswana. The company also reduced its prices by as much as 10 percent on some goods, Rapaport was told. Rowley declined to comment on price adjustments at the sight, but noted that the company’s rough price index fell 8 percent in the first half of the year.

Product Appetite:

He reported that there has been a slight increase in appetite for product among sightholders this week since inventory has been significantly reduced, which has influenced some stability in polished prices.

“I wouldn’t expect it to bounce back overnight but I think we’re in a much more reasonable position than we were a few months ago,” he said. “With Christmas approaching, this [August] sight and the next sight are the last ones for manufacturers to be ready for the season. We expect to see more of the polished pull through and a gradual improvement in the market.”