Diamond Manufacturing - Page 2 of 4

The economics and activities of diamond manufacturing. A sensible place to start a background journey into the midsection of the diamond value chain.

What is Diamond Manufacturing?

It is the series of actions that transform a rough diamond into a polished diamond ready to be set in a jewelry item. It is an activity that not only transforms a rough stone into a polished diamond, the transformation process is also where the most value is added to a diamond.

The polishing process takes place in the midsection of the diamond value chain, commonly referred to as the midstream. Here is the place where knowledge, skill, and cutting edge technology come together, and are of the outmost importance for the diamond value chain.

What Happens in Diamond Manufacturing?

Diamond manufacturing involves:

  • Rough diamond purchasing
  • Rough diamond assessment
  • Sophisticated technological tools
  • Cutting
  • Polishing
  • Grading
  • Wholesale of polished diamonds

Where are Most Diamonds Manufactured?

The majority of diamonds are polished in India. Manufacturing also takes place in Belgium, Israel, China, and Thailand.

Issues Related to Diamond Manufacturing

This section of the diamond value chain is not just the key transformation spot for diamonds, it is also the most vulnerable part of the diamond value chain. It is heavily reliant on complex financing and suffers from the thinnest margins of all sections of the diamond industry.

It also bears the greatest risk. Diamonds can break during the polishing process. The thin margins and difficult profitability means that business and can easily fall into losses. Most manufacturers are in a volume business, which does not lend itself to improved profitability.

For a deeper look into this topic, please see below:

7

Inventories Up, Demand Down and Lab-Grown Prices Continue to Drop

Diamond Inventories Up Demand Down and Lab-Grown diamond Prices Continue to Drop - featured

The diamond industry is out of balance. The rough diamonds produced at mines only partially fit current consumer demand. This may explain why price movement is restrained. Meanwhile, among lab-grown goods, matters are a little more lively. Although prices of smaller lab-grown goods have been mostly stable, the prices of larger goods sank in the first quarter of 2019. A …

Did a Troubled 2017 Promise Growth in 2018?

Did a Troubled 2017 Promise Growth in 2018?

Is the diamond industry moving forward? Is it on a growth track? Is it taking steps that would lead it to capture market share from other luxury goods, greater share of wallet, or at least improve its margins? Looking at 2017, it was somewhat better than 2016, which in turn was an improvement over 2015. Yet an uneasy feeling is …

3

What Set Up the Latest Bankruptcy?

What Was the Setup of the Latest Bankruptcy - featured

I’ll open with a confession: I don’t know where I’m going with this text. I usually start writing knowing what I want to say, and with a conclusion in mind. The conclusion is a destination. But not today. The thing is that it’s not just me – it’s the industry too. We don’t know where we are going, and that …

KP: Production Value Plunges, China Caves, and Manufacturers Focus

KP production plunges china caves manufacturers focus

 A look at the recently released Kimberley Process (KP) figures for 2016 reveals several interesting trends affecting the global diamond industry. First is that the top five producing countries have lost some of their market share, fewer rough diamonds are going through China, and yet this is still a very concentrated industry from a country perspective. In some areas, it is …

12

The Scary Stuff Nightmares Are Made Of

Growing Demand for Lab-Grown and the Scary Nightmares it Induces

For years the diamond industry’s outward attitude to lab-grown goods was that these stones were some sort of fake. Even the nickname given them expresses that disdain – “synthetics.” Yet underneath this expression of disrespect lies a deep sentiment, a real feeling that one can almost smell – a mixture of contempt and deep fear. Don’t balk because that fear …

1

A Market in Chaos

A diamond market in chaos

What an unusual period we are in. Looking back a month, everything appears to be upside down. Rough diamond imports were out of sync: values were up, but not volumes. Polished diamond exports ahead of JCK were lopsided. Polished diamond prices eased instead of rising, but rough prices increased. Are these signs of a normal market, or of a diamond …

2

Fine Jewelry Sales Up, Rough Prices Down, Optimism Ensues (Unjustly)

Fine Jewelry Sales Up, Rough Prices Down, Optimism Ensues (Unjustly)

Fine jewelry sales in the US posted a rise in November, and there are signs that December was alright too. In the last couple of weeks of December, Mumbai diamond traders had a sudden rise in sales, both from the US and China, leading to a burst of optimism that drove demand for Sight goods. De Beers in turn lowered prices …

This is the Lost Year in Rough Diamonds

This is the Lost Year in Rough Diamonds - feature image

What a horrible year it was. Miners, traders and retailers will remember 2015 as the year of lost capital, walking on the cusp of bankruptcies, lost opportunities and diminishing value of diamonds. How did it happen, could it been avoided and what lessons can be drawn from it – short term and long? The Last Cycle of 2015 – Sight …

5

The Lesson of Sight 8: No Need for More Rough

The Lesson of Sight 8: No Need for More Rough - featured

There is a wide range of estimates about the value of the goods De Beers offered this cycle. Be it $350 or $500 million, very little was purchased. A current estimate puts actual purchases by Sightholders at $150-$200 million, underscoring that the diamond industry is not seeking rough. No Need for More Rough, At Least 50% Refusals It does not …

Sightholders Don’t See Relief in Sight

Sightholders don’t see relief in sight - featured image

Pop quiz: Rough diamond prices were reduced at Sight 7 by: 13%, 9% or 5%? If you examine the price list, you’ll see that the price of some goods decreased by as little as 2.5%, whereas others were cut by as much as 20%. One report may have been based on a simple average of the discounts and came close …