Diamonds are not forever?

Photo: Jeffrey Beall

Diamonds may not be forever after all, as the industry finds itself facing a less certain future.

New forecasts from consultants Chaim Even-Zohar of Tacy Ltd and Pranay Narvekar of Pharos Beam predict that, while the $80 billion spent on diamonds in 2014 was a record, profits for manufacturers will halve this year to $100 million - a significant drop from 2010, when profits totalled $900 million.

Even-Zohar estimates that in India and China, 300,000 of the 1 million people employed in gemcutting have been laid off,

"Manufacturing is not just work,"  Yoram Dvash, a high-end polisher in Israel, tells Reuters. "It's out of love - taking the rough stones, with all their odd shapes, and bringing out the most precious thing in the world. But this love costs a lot of money. And rough prices have been going up and up with no connection to demand."

Indeed, demand is not aas high as it once was, as people increasingly treasure luxury items, such as smartphones, over precious gems.

In Japan, owners have begun to sell off diamonds at a record pace to China and India: exports of used diamonds climbed 77 per cent this year, according to Finance Ministry data.

"I want to spend the money for traveling or dinner rather than just holding the diamond in my closet," one housewife told The Japan Times.

She did not reveal the price paid for her ring, but confirmed it was less than the amount she paid 30 years ago.

Figures from the National Police Agency who that the number of official second-hand precious metals and jewelery dealers have risen 23 per cent in the past decade.

For Chinese and Indian buyers, meanwhile, the weak yen means that second-hand jewels from Japan can be more attractive.