Diamond has young patrons too! Millennials and Gen Z biggest consumers
A DeBeers report claims global diamond production may decline in 2018 on mine closure, favorable demand will keep prices elevated
The global diamond output is likely to decline in the calendar year 2018 due to the suspension of excavation in mines by leading producers. De Beers Group’s latest Diamond Insight Report, released on Thursday, said that Alrosa-owned Mir mine suspended operations this year.
"However, businesses in this sector will need to continue adapting to the evolving landscape,” said the report. De Beers, however, hoped that purchases made by Millennials and Gen Z generations accounted for two-thirds of global diamond jewellery sales in 2017, as demand in the segment reached a new record high of $82 billion. Millennials are consumers between 21 and 39 years, representing 29 percent of the world’s population and are currently the largest group of diamond consumers.
They accounted for almost 60 percent of diamond jewellery demand in the US in 2017 and nearly 80 percent in China. Gen Z, those currently aged up to 20, is an even larger consumer generation - representing 35 percent of the world’s population and will come of age as diamond consumers over the coming decades.
Also, Rio Tinto has guided fall in production at its operations resulting in a decline in estimated rough diamond output in 2018. “Looking further ahead, production is expected to continue falling as new projects and expansions fail to replace lost output from closed mines. By 2028, several large mines will reach the end of their life, while only a few new projects are in the pipeline,” said the report.
Global diamond production posted a 14 percent increase at 164 million carats in 2017 from 144 million carats in the previous year. Total rough diamond production is estimated at $17.5 billion in 2017, a 15 percent increase on 2016. De Beers Group accounted for the largest increase in production volume (6.1 million carats), followed by Rio Tinto (3.7 million carats) and Alrosa ( 2.3 million carats). Russia retained its position as the largest producer country in carat and value terms, the report said Meanwhile, sales of rough diamonds to cutting centers in the first half of 2018 were higher than the same period in 2017.
Russia’s Alrosa de-stocked seven million carats in the first half to report an eight percent increase in rough diamond revenues. While De Beers Group’s sales were lower in volume terms, sales values to cutting centers were maintained by higher prices and an improved mix. Rough sales to cutting centers, however, was reported at $16.6 billion in 2017, a 2 percent increase from the previous calendar year. De Beers Group remained the largest supplier, but with a reduced share of 34 percent (from 37 percent in 2016).
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