This content was first published on IGR – Italian Gemological Review no. 7 in 2019. The information provided here is therefore current as of the original publication date.
A Power Grab
In our Diamonds Outlook 2019 we said that stability is fading away, changes are advancing, and in such unstable times natural diamonds need to protect themselves against several attacks, as in an action movie: which superpowers will our superhero Adamas use to come out unscathed as always?
Ambitious young people are often unscrupulous, and so are synthetic diamonds. Manufacturers and distributors are effortlessly using ethical and green issues as a powerful marketing weapon to reach out to Millennials. But are we sure that synthetic diamonds can already be applauded as more sustainable than our dear old natural diamonds? From an environmental point of view, maybe.
But from a social point of view, natural diamonds are crucial because they can generate employment to a degree that synthetic diamonds will never be able to ensure. And if those jobs were lost, this would affect countries that do not have many alternatives without the mining industry.
Will synthetic diamonds be able to offer the same magical experience of owning an emblem of value, strength, love, mythology? I will not dwell on ethics but let me ask the experts a question. Is it more ethical to keep a diamond on the hand of your loved one or in your safety box? Or perhaps is it even more ethical to fill up your car with petrol?
Let’s see now how markets have behaved.
Panicking
The uncertainty and fear of industry players who cannot see a clear future is reflected in market trend graphs. This was also perceptible during the latest industry fairs, including Las Vegas (JCK) and Hong Kong. The diamond industry has immediately run for cover, reducing production by around 30%.
Producers’ profits had never been so low and, as evidenced by the latest Rapaport data, not even the recent cut in raw diamond prices was enough to revive the market as much as big investors would like. This time of uncertainty was also fostered by increasing tension between the US and the Middle East, probably due to the recent rise in the price of gold. Is that the end?
No. It is a new beginning: the world changes quickly; we just need to catch up. Diamonds are going to have a hard time in the coming years, but if we raise awareness among industry players and encourage them to reconsider their approach to the sale of natural diamonds, giving them back the worth that they deserve and represent (not only financially speaking), we will be able to restore consumer confidence, currently undermined by cross-attacks.
By Sergio Sorrentino, published on IGR – Rivista Italiana di Gemmologia n. 7, Summer 2019.
