Rough Supplies, Prices are Risky According to ABN Amro
October 26, 09
The diamond industry is stabilizing, but not recovering, says Victor van der Kwast, chief executive officer of the International Diamond and Jewelry Group at ABN Amro Bank NV. Van der Kwast is warning that rising supplies, demand and prices of rough diamonds, are risky.
In a written comment to Bloomberg on behalf of the Antwerp World Diamond Centre (AWDC), van der Kwast states that rough diamond supplies are too high and that rough buyers should refuse to the goods.
He views the purchases as misplaced loyalty to the industry.
Following is the full text:
“I do not believe there is a recovery taking place despite the strong rises in rough diamonds that have taken place since May-June. In my opinion, this is nothing more than a stabilization process or what you might call a pre-recovery stage. I see a lot of companies in the industry trading with each other, but I do not see much new money coming in.
“The supply of goods to the market is again becoming too large which can be seen in the US$1 billion of diamonds sold by the various miners (De Beers, Rio Tinto, Alrosa, BHP Billiton, etc.) in the last Sights. Firms just need to say ‘no' and stop buying due to an out-of-date loyalty to the diamond business, as this is not profitable and can even be risky."