TIME TO SCORE: Diamond prices may be a steal after the Chinese stokc market crash…load up now
Diamonds may be a steal after China crash
The global diamond industry is in rough shape right now, and China’s stock market crash is making things worse.
A slowdown in demand is already hurting miners, cutters, polishers and retailers, and now Chinese consumers are expected to cut back on diamond purchases in the wake of the stunning boom-bust stock market cycle.
That could be good news if you’re shopping for a diamond ring.
“If there is one commodity that is likely to feel an impact from recent events in China, it is diamonds,” said Barclays mining analysts in a research report. “Diamond purchasing decisions depend on consumer confidence, which is correlated with equity market returns in China.”
China’s has rapidly become the second largest diamond market in the world, after the U.S. It now accounts for 16% of global demand.
Chinese women in particular are keen on buying diamonds and precious metals as investments, explained Ben Davis, a mining analyst at Liberum in London.
But purchases slowed around March as people started diverting their money into China’s soaring stock markets, he said. Then they lost out when the main Shanghai index crashed by roughly 30% in a month.
Diamond market leader De Beers is bracing for much slower global demand than in previous years. It expects to produce as few as 29 million carats in 2015, compared with rough diamond sales of 32.7 million in 2014.
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