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For several years already diamond market analysts have been predicting an impending shortage of rough diamond supply, triggered by a consistent rise in demand for polished goods, largely from the developing markets of Asia, coupled with a lack of new diamonds scheduled to come on stream over the coming decade. In the wake of the COVID-19 crisis, however, that problem seems to have placed on the backburner, as least for now.
For more than 50 years, the task of marketing diamonds and diamond jewelry was carried out by one company, De Beers, which it one stage spent about $250 million per year generically promoting the diamond dream. The results were spectacular, transforming the diamond into one of the world’s most sought-after luxury products.
Since the start of the worldwide coronavirus crisis in February, luxury market analysts have been struggling to forecast how the fast moving and often unpredictable pandemic is likely to impact on an industry that was worth more than $300 billion at the end of 2019.
One of the most poignant signs of the COVID-19 lockdown in the diamond business over the past several months has been the closure of the diamond trading halls in the various bourses around the world. More than just places where people do business, to many they represent the heart and soul of the industry, the common space where colleagues meet, interact and exchange information.
Mother’s Day has traditionally offered a strong selling opportunity to the jewelry industry, but with the world caught in the grip of the COVID-19 pandemic, questions were being asked whether 2020 would prove an exception to the rule. Actual sales data is not yet available, but indications is that consumers still celebrated their partners, matriarchs and grandparents, albeit modestly as one would expect in a time of economic hardship.
While the COVID-19 is certainly a threat to the artisanal diamond mining communities in African, the economic effects could outweigh the health effects, reports the World Diamond Council (WDC) in its latest newsletter.
Just as the jewelry industry appears to be consolidating, so does the rough diamond business, at least geographically, states Learn Bonds, a London-based financial publication serving the investment market. But, while the study has been quite widely quoted in the trade, it does appear to include certain blind spots and quite a few possible inaccuracies.
There are many business sectors that are likely to be inexorably changed once the COVID-19 crisis comes to an end. One of the them is auction houses, which have quickly pivoted to online sales, with a degree of some success.
In many respects, retail has shifted to an experiential model, whereby store functionality –which refers to the basic act of locating, selecting and buying the product – takes second place to the experience that the customer goes through from the moment he or she has engaged with the business, which is then reinforced by the experience of owning the product.
2020 will be a year that the luxury markets would prefer to forget, write Jean-Noël Kapferer and Jean Revis in a recent edition of the respected Business of Fashion journal. However, it is not a question of if the luxury markets will recover from the COVID-19 crisis, but rather of when. But when they do, they will be greatly changed.
The giant Indian cutting industry will play a key role in the recovery of the diamond sector from the extended global lockdown that had been instituted as a result of the COVID-19 coronavirus. But with the pipeline already clogged with excess rough supply before the start of the crisis, calls are growing for a temporary moratorium on rough diamond purchases, even after cutting plants resume activities, so as restore a sense of balance in the market.
On December 31, the municipal health commission in Wuhan, China, reported a cluster of unusual pneumonia cases in the city, and six days later the World Health Organization issued a disease outbreak report. This was soon identified by genetic sequencing as a novel coronavirus and evidence indicated it was highly transmissible.
With many of the world’s major diamond markets in lockdown as a result of the COVID-19 coronavirus pandemic, mining companies are feeling the heat. Among the latest to reveal this predicament is the De Beers Group, whose parent company, Anglo America, revealed that it has cut its production forecast sharply for 2020, from what it previous had been planned.
History was made on April 20 – quietly in the turmoil of the ongoing CIVID-19 pandemic – when the presidency of the diamond trade’s premier representative organization, the World Federation of Diamond Bourses (WFDB), returned into Israeli hands.
At the end of March, the consulting firm Boston Consulting Group is revised down its earlier negative forecast on the impact of the COVID-19 pandemic on luxury sales. Brands, it stated, should prepare for a decline in sales of between $85 and $120 billion in 2020, equal to about 29.2 percent of the $350 billion luxury market.
As governments begin considering an exit strategy from the COVID-19 shutdown, members of the luxury sector are looking to China, where the epidemic first began but over the past month has being reopening for business.
With the worldwide battle to contain and defeat the COVID-19 coronavirus in full swing, the diamond, jewelry and luxury industries are stepping up their efforts to support public health and the medical teams out in the field, and well as dealing with the economic fallout from the pandemic.
During these days of pandemic and social distancing, a lighter but a more uplifting story is sorely needed, and especially one that is sweet, or to be more precise sweet smelling.
It may seem early to some, but the time has arrived to beginning thinking about the world after the COVID coronavirus virus. Whether that is a matter of months or more than a year away, most analysts agree that the effects will be substantial, and often in ways that are unexpected. The diamond business will not be excluded.
Belgium is one of the countries that took a devastating blow from the COVID-19 pandemic. With more than 51,000 infections reported, the country’s the more than 8,400 people that lost their life made its per capita death toll the highest among all developed countries. In its efforts to prevent the spread of the disease, the government put much of the country into lockdown, and effectively shut down the economy. Two months later, it and its diamond industry are slowly returning beginning their return to normality.
As the COVID-19 coronavirus spreads further in countries around the world, the ripple effect of the pandemic continues to upend the business sector, with the diamond industry being no exception. A case in point is that, for the first time in 42 years, the Rapaport Group has announced it was suspending publication of its weekly price list for more than one month, until May 1.
Diamond deposits extracted from an exploration project on Baffin Island, which is part of the Canadian territory of Nunavut, and is the country’s largest water-bound landmass and the fifth-largest island in the world, has led geologists to a startling conclusion.
With international air travel reduced to a bare minimum as a result of the COVID-19 coronavirus, and an increasing number of countries allowing entry only to citizens and other legal residents, rough diamond mining companies are being forced to consider new alternative operating procedures in a sector where typically buyers have traveled in to examine good visually before purchasing them.
As the Israeli government ramps up restrictions on the public and the business sector, as part of its efforts to mitigate the spread of the CODID-19 coronavirus, the country’s diamond industry is scrambling to adjust to the new situation.
Alrosa, state-controlled Russian diamond mining company that is the world’s largest producer of rough diamond, has reported that revenues in 2019 fell 21 percent drop in rubles to RUB 238 billion ($3.32 billion). The company cited “weaker demand in the rough and polished diamonds market.”