The global diamond industry is witnessing a dramatic shift in the demand for rough diamonds, particularly impacting the popularity of one-carat and two-carat solitaire bridal rings in the United States.
This transformation has been attributed to an increasing number of Americans opting for engagement rings adorned with lab-grown diamonds over their natural counterparts.
While diamond demand across various segments has softened in the wake of the pandemic, consumers have redirected their spending towards travel and experiences, while economic challenges have impacted luxury purchases.
The primary driver behind this price drop, according to industry experts, is the surging demand for lab-grown diamonds. The synthetic diamond industry has strategically targeted this price-sensitive consumer segment, reaping the rewards in the world’s largest diamond market.
It’s important to clarify that this shift doesn’t necessarily translate into deep discounts on engagement rings themselves. Instead, the impact is primarily felt in the rough-diamond market—an opaque realm inhabited by miners, merchants, and traders, several steps removed from the jewelry store price tags.
Nevertheless, the rapid and substantial decrease in prices for one of the diamond industry’s pivotal products has left the market in a state of upheaval.
The pressing question now is whether the diminishing demand for natural diamonds in this category represents a lasting change and, crucially, whether lab-grown gems will expand their presence into higher-priced diamonds, typically dominated by Asian buyers.
De Beers, a leader in the industry, attributes the current weakness to a natural downturn in demand following a pandemic-induced surge in prices when consumers were confined to their homes. While acknowledging some market share erosion by synthetic stones, the company views it as a cyclical, rather than structural, shift.
Paul Rowley, head of De Beers’ diamond trading business, stated, “There has been a little bit of cannibalization. That has happened, I don’t think we should deny that. We see the real issue as a macroeconomic issue.”
Lab-grown diamonds, identical in physical properties to their mined counterparts but produced in a matter of weeks in controlled environments, have long been seen as a potential threat to the natural mining industry.
Advocates argue that they offer a more affordable alternative with fewer environmental and social concerns associated with traditional mining.
For much of the past decade, this threat remained hypothetical, with lab-grown diamonds making limited headway outside of lower-priced gift segments. However, this is changing rapidly, as lab-grown products gain significant traction in the vital US bridal market.
To counter weakening demand, De Beers has responded by aggressively slashing prices for “select makeables,” rough diamonds ranging from 2 to 4 carats that can be cut into smaller, high-quality stones for bridal rings. Over the past year, De Beers has reduced prices in this category by more than 40%, including a cut of over 15% in July, according to insiders.
De Beers, historically a monopoly in the rough diamond market, typically resorts to aggressive price cuts as a last resort. The scale of the recent price drops for this benchmark product is unprecedented, according to industry traders.
In June 2022, De Beers was charging approximately $1,400 per carat for select makeable diamonds. By July this year, that price had plummeted to about $850 per carat. There may still be room for further price adjustments, as these diamonds remain 10% more expensive than their counterparts in the secondary market, where traders and manufacturers conduct transactions among themselves.
BUA Cement Takes Bold Step to Reduce Ex-factory Cement Prices to N3,500/bag
BUA Cement Plc has announced a significant reduction in ex-factory cement prices.
Effective October 2, 2023, BUA Cement will sell its cement at a remarkable rate of N3,500 per bag, affirming its commitment to providing affordable building materials to the Nigerian populace, Investors King gathered.
The statement in part; “As per the commitment made to reduce prices and following a periodic review of our operations for efficiency, the management of BUA Cement Plc wishes to announce and inform our esteemed customers, stakeholders, and the public that effective October 2, 2023, we have decided to bring the price reduction forward. As a result, BUA Cement would now be sold at an ex-factory* price of 3,500 Naira per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.”
This announcement comes as a surprise to many, as BUA Cement had previously indicated its intent to lower cement prices upon the completion of new production lines by the end of the year. However, the company’s management decided to expedite the price reduction, allowing Nigerians to enjoy the benefits ahead of schedule.
Upon completion of its ongoing plant construction projects, which will increase production volumes to a staggering 17 million metric tonnes per annum, BUA Cement PLC intends to review prices further by the first quarter of 2024. This review aims to ensure that their pricing remains competitive and advantageous to customers.
The company also clarified that all pending and undelivered orders, which had been paid for at the previous prices, would be adjusted downward to the new rate of N3,500 per bag starting October 2, 2023. BUA Cement’s licensed dealers have been urged to ensure that end-users benefit from this reduction in ex-factory prices, and the company has pledged to closely monitor field sales to ensure compliance.
Statement in full: We refer to our previous pronouncements regarding our intent to reduce cement prices upon the completion of our new lines at the end of the year, in order to spur development in the building materials and infrastructure sectors.
As per the commitment made to reduce prices and following a periodic review of our operations for efficiency, the management of BUA Cement Plc wishes to announce and inform our esteemed customers, stakeholders, and the public that effective October 2, 2023, we have decided to bring the price reduction forward. As a result, BUA Cement would now be sold at an ex-factory* price of 3,500 Naira per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.
Upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17 million metric tonnes per annum, BUA Cement PLC intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024.
NOTE: all pending, undelivered orders which had been paid for at the old prices will be reviewed downwards to N3500/bag in line with the new pricing from October 2, 2023. Our licensed dealers are also enjoined to ensure that end-users benefit from this reduction in ex-factory prices as we will monitor field sales to ensure compliance.
01 October, 2023
Manufacturers Cut Spending on Alternative Energy Sources as Electricity Supply Improves
Nigerian manufacturers reduced their spending on alternative energy sources by 21.25% to N60.4 billion in the first half of 2023, according to the Manufacturers Association of Nigeria (MAN).
This decline is attributed to the increased availability of electricity from the national grid, which improved to 11.3 hours per day, up from 10.2 hours in the same period of 2022.
The report also indicated a slight increase in daily power outages to 4.7 times from 4.4 times in H1 2022.
These improvements in grid electricity availability have positively impacted the manufacturing sector’s energy expenditure, leading to a significant drop from N76.7 billion spent in the second half of 2022.
However, the initial high expenditure on alternative energy sources was driven by skyrocketing diesel prices.
The cost of diesel had surged due to foreign exchange challenges and the implementation of a 7.5% Value Added Tax on Automotive Gas Oil (diesel).
Diesel prices in many states had risen to between N900 and N950 per liter, which threatened the production capacity of numerous manufacturing entities.
The Nigerian Textile Manufacturers Association expressed concerns about the potential closure of textile factories and job losses due to rising energy costs. Textile manufacturers, in particular, found it challenging to afford diesel at such prices.
The Chief Executive Officer of Coleman Technical Industries Limited also highlighted the increased production costs associated with higher diesel prices.
While the improvement in electricity supply is a positive development for manufacturers, the industry remains vigilant about energy costs and their impact on production.
Dangote Group Subsidiaries Contribute N474 Billion in Taxes to Federal Government Over Three Years
In a significant testament to its commitment to corporate citizenship and financial responsibility, three subsidiaries of the Dangote Group have revealed that they paid a substantial total of N474 billion in taxes to the Federal Government over the past three years.
The disclosure was made by Hashem Ahmed, an official representing the multibillion-dollar conglomerate, during the opening ceremony of the 18th Abuja International Trade Fair, which focused on the theme ‘Sustainable financing and taxation as drivers of the new economy.’
The Dangote Group, led by its President Aliko Dangote, stands as not only the largest private-sector employer but also the country’s leading taxpayer. The remarkable N474 billion contribution was primarily made by Dangote Sugar, Dangote Cement, and Dangote Salt.
Also, the group has a longstanding history of extensive financial support, empowerment initiatives, corporate social responsibility programs, sponsorships, and philanthropic endeavors, amounting to several billions of naira.
Hashem Ahmed also expressed the group’s satisfaction with the Federal Government’s commitment to tax reform policies aimed at broadening the tax base and providing essential funding for infrastructure development in the country.
The Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, who spoke at the event, announced the government’s comprehensive plan to support small businesses and startups amid Nigeria’s economic challenges.
The plan includes a N75 billion investment by March 2024 to bolster the manufacturing sector, grants for microbusinesses in every local government, and a N75 billion fund to support up to 100,000 startups and MSMEs at favorable interest rates repayable over 36 months.
The government has also initiated partnerships with tech giants like Microsoft and the African Development Bank, signaling a bright future for Nigeria’s economic growth and innovation.
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