Inventory management dynamics
Diamond price formation in the short term Looking at the future of the natural diamond industry, BCG said in the in collaboration with De Beers Group that “Stable midstream inventories expected to remain, while efficiency reduces downstream inventory!” Natural diamond inventories are held across all stages of the diamond value chain at varying levels. Inventory management dynamics directly influence diamond price formation in the short term by impacting the immediate supply availability. Midstream and downstream inventory levels are particularly relevant as demand flows up through the value chain. Midstream: In the short term, midstream inventories fluctuate, largely driven by prevailing market conditions, short-term views on the market outlook, and financing. Longer term, structural midstream inventory levels are dictated by the need to manage stock for operational purposes. Although efficiency and scale gains in the midstream have generally r...