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Diamond symposium focuses on 'new normal'

November 17, 2009

Antwerp, Belgium--The coming year is likely to be a year of growth for the diamond industry, but the sector needs to recognize that there is a "new normal" in the global economy.

That was the message that speakers conveyed at the second annual Antwerp Diamond Symposium, held on Sunday and Monday in the diamond trading center of Antwerp, Belgium, and organized by the Antwerp World Diamond Centre.

According to a news release, moderator Chaim Even-Zohar, a longtime industry consultant and journalist, and economist Pranay Narvekar said the retail market would increase 0.4 percent.

However, because of de-stocking in the pipeline that has taken place in 2009, this modest increase in retail sales will result in a 25 percent increase in polished sales at cutting centers, to $17.1 billion.

Speakers indicated that the recovery is underway but will be slow.

"The gravity of the issues facing us should not scare us," Hanard said, according to the release. "If we act proactively, we will succeed. We have the destiny of the industry in our hands. Are we looking for answers, results and predictions? We will not solve all of the problems today, but we can get an insight into how we can go forward. I do not doubt that the different messages carried out through this symposium will be put into practice in coming months."

Another issue addressed at the symposium was that the number of business failures over the past 18 months did not exceed the rate expected in a non-recession year, despite the very difficult global economic conditions.

According to the release, speakers attributed this relative stability to a readiness on the part of diamantaires to inject personal equity into their companies, the policies of the mining companies, which cut production and suspended sales during the first part of the year, and the banks, which maintained the general level of credit they extend to the diamond industry.

Representatives of banks and mining companies that addressed symposium attendees pledged their continued support for the industry, according to the release, and Alrosa Vice President Sergei Ulin drew applause from the audience when he stated that Russian authorities had no intention of flooding the market with rough diamonds to make a quick profit.

Alrosa suspended sales of rough entirely for a period of months earlier this year due to the economic downturn and subsequent drop in demand for diamonds.

In addition, symposium speakers addressed concerns over the recent 30 percent rise in the price of rough over the past six months, despite no corresponding increase in the price of polished.

To maintain recovery in the diamond industry, speakers warned against creating another speculative price bubble.
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