Diamond Market on Road to Recovery after Crisis

To the tremendous relief of the international diamond industry, the diamond trade is finally starting to show signs of recovery after suffering a dramatic blow from last year's economic crisis. During the recession, diamond sales plunged to unforeseen lows, but in the past few months the demand for diamonds has been steadily climbing. In fact, this month things are even starting to look bright in the diamond industry.

Late last year, the diamond market screeched to a standstill after banks cut off loans to manufacturers and sightholders who purchased rough diamond stock, typically on credit. As a leader in the diamond industry, De Beers' response to the economic slowdown was indicative of the severity of the crisis in the diamond market. In Botswana alone, De Beers, which has its tentacles in virtually every branch of the diamond industry - from diamond mining to diamond processing and manufacturing industrial diamonds, recorded a 90% drop in sales, shutting down all four of its Botswana diamond mines in January 2009.

Yet now, a top De Beers executive in Botswana tells journalists that the light is beginning to gleam at the end of the tunnel. In the last quarter, diamond sales have picked up sharply since the first half of the year, and now they are just 30% lower than they were before the beginning of the economic crisis.

One of the key occurrences that helped boost diamond sales was the stupendous expansion of the diamond market in China in the past year. China, apparently, did not suffer too terribly from the recession. Diamond sales increased so much in the Asian country that they now account for a full 5% of diamond jewelry sales in the world. All the same, the United States is still responsible for a full half of the demand for diamond jewelry all over the world.

India, also, is a promising prospect for diamond sales, with the demand for diamonds in the South Asian country escalating at an astounding rate. According to diamond market analysts, all eyes are on the Indian and Chinese markets these days, and these two countries are important prospects for diamond sales in the future.

Another De Beers executive told CNN this month that the demand for diamonds was even likely to rise above supply, and that the company intends to go back to producing diamonds at full throttle.But we're not out of the woods yet. Full recovery of the diamond market still is not expected until around 2012, according to officials from Debswana, which is the joint diamond venture between De Beers and Botswana.

With diamond operations in South Africa and Canada, the diamond mining and development company, Rockwell Diamonds, is also showing signs of recovery, and looks toward the future with 'cautious optimism'. In general, jewelry sales are on the rise, and with the holiday season coming up and people pulling out their wallets again, things are only expected to improve in the near future.