The miner said that sustained diamond jewelry demand growth in the US and marginally positive growth for the full year in China (in local currency, though declining slightly in US dollars) contrasted with weakening demand in the other main diamond markets.
In India, a month-long jewelers’ strike last March and the government’s surprise demonetization program which started in November, had a considerable negative impact on demand,.
"Macro-economic conditions underpinning consumer demand for diamonds remain broadly stable in aggregate, with the US expected to continue to be the main driver of global growth in 2017. The extent of global growth will, however, be dependent upon a number of macro-economic factors, including the new administration in the US, the strength of the US dollar impacting consumer demand, economic performance in China, the effects of Indian demonetization, and sentiment following the main US and Chinese New Year retail season.
"With midstream stocks having returned to more typical levels in 2016, rough diamond demand is expected to normalize in 2017, reflecting underlying consumer and retail demand. While producers continue destocking, forecast diamond production (on a 100 percent basis, except Gahcho Kué on an attributable 51 percent basis) for 2017 is expected to be in the range of 31-33 million carats, subject to trading conditions."
For the full year, global consumer demand, in US dollars, is estimated to be in line with 2015. Additional marketing in the US, China, India and Japan in the final quarter of the year, the main selling season, had a positive impact.
Producers destocked during 2016, as sentiment in the midstream improved and rough and polished inventories normalized, supported by a series of initiatives put in place by De Beers, starting in the second half of 2015. These included lowering rough prices, providing flexibility to Sightholders for their purchase arrangements and increased marketing activity to drive consumer demand.
Rough diamond production decreased by 5 percent to 27.3 million carats from 28.7 million carats in 2015, reflecting the decision, taken in 2015, to reduce production in response to prevailing trading conditions.
