why the diamond industry is at risk
TRANSCRIPT
By Ehud Arye Laniadowww.ehudlaniado.com
Why the Diamond Industry is At Risk: The Many Forces Driving Rough
Diamond Purchases
DOC ID
Presentation by Ehud Arye Laniado
2
•Why the Diamond Industry is At Risk: The Many Forces Driving Rough Diamond Purchases
A link to the full article can be found on the last slide of the presentation
Aug 2016
The views expressed here are solely those of the author in his private capacity. None of the information made available here shall constitute in any manner an offer or invitation or promotion to buy or to sell diamonds. No one should act upon any opinion or information in this website (including with respect to diamonds values) without consulting a professional qualified adviser.
DOC ID
Why the Diamond Industry is At Risk: The Many Forces Driving Rough Diamond Purchases
3
Here is a summertime conundrum to contemplate: Which forces drive business activity besides the obvious: buying, adding value and selling at a profit? There are other forces at work in the diamond industry, and they have a potentially devastating effect.
Aug 2016
DOC ID
Why the Diamond Industry is At Risk: The Many Forces Driving Rough Diamond Purchases
4
The summer vacation is almost over, most diamond industry people are back to work, and we are hearing of steady demand for rough diamonds by diamond pipeline midstream players. A typical manufacturing business buys raw materials, manufactures a product, and sells downstream to wholesalers, retailers or consumers. The common approach is to sell at a price that covers the cost of materials and manufacturing, and leaves over a profit. That is how capitalism works: the main driver to doing business is the profit. Last week, Tiffany andSignet released their financial reports, which showed a decline in quarterly sales amid weakening consumer demand, and expectations for a less-than-spectacular holiday season in the US.
Aug 2016
DOC ID
Why the Diamond Industry is At Risk: The Many Forces Driving Rough Diamond Purchases
5
Considering the times, as supply outstrips demand, it has become clear that the basic capitalistic driver is not at work here. So what is driving this demand? Part of it is the decline in supply. De Beers and ALROSA supplied less rough diamonds to the industry in recent months. Coupled with the recent fire at Dominion’s Ekati process plant, overall supply to the manufacturing sector has declined. Perhaps there is a psychological element serving as a driver, but supply is still higher than demand. Knowing that manufacturers are rational people, a supposed shortage is at best a minor contributor.
Aug 2016
DOC ID
Why the Diamond Industry is At Risk: The Many Forces Driving Rough Diamond Purchases
6
The views expressed here are solely those of the author in his private capacity. None of the information made available here shall constitute in any manner an offer or invitation or promotion to buy or to sell diamonds. No one should act upon any opinion or information in this website (including with respect to diamonds values) without consulting a professional qualified adviser.
Aug 2016
A full version of the article can be found here:http://
www.ehudlaniado.com/home/index.php/news/entry/why-the-diamond-industry-is-at-risk-the-many-forces-driving-rough-diamond-purchases
