Photo courtesy of de beers.
The De Beers Group announced that rough diamond production increased by 134 percent to 8.2 million carats, when compared to the corresponding period last year. In its statement, the company said that this reflected a planned increase in production to meet stronger demand for rough diamonds, as well as the impact of COVID-19 lockdowns across southern Africa during the second quarter of 2020.
In Botswana, De Beers’ production increased by a massive 214 percent to 5.7 million carats, mainly because it was being contrasted by a quarter in 2020 that was dominated by the COVID-19 lockdown during the second quarter of 2020.
De Beers production in Namibia production decreased by 6 percent to 0.3 million carats. This was primarily due to planned maintenance of the Mafuta undersea mining vessel, which completed during the quarter, and another vessel that remained demobilised.
The group’s South African production during the second quarter increased by 130 percent to 1.3 million carats, in part due to planned treatment of higher-grade ore from the final cut of the Venetia open pit.
Production in Canada increased by 14 percent to 0.9 million carats, mainly reflecting the impact of the COVID-19 measures implemented in 2020.
ONLINE SALES AS A DISRUPTIVE FORCE
As has been indicated by other studies, the digital environment was almost certainly the most disruptive force in the market over the past 18 months.
About 72 percent of the consumers polled in The Plumb Club survey confirmed that they had bought jewelry online. In fact, 39 percent said that spending more time attached to the world via the Internet was a decisive factor in inspiring them to buy jewelry online.
But it was not only the ecommerce space, but also the massively increased use of videoconferencing during the pandemic that had an effect. Some 41 percent of consumers polled that they inspired to wear jewelry that would be seen on the screen during video meetings.
Still, one should not yet eulogize the brick-and-mortar jewelry stores. While 28 percent of respondents said that they usually buy jewelry online, 63 percent reported that, despite COVID, they still prefer to purchase in stores.
PRICE NOT THE OVERWHELMING CONSIDERATION
The Plumb Club survey also looked at more general consumer preferences related to the purchase of jewelry, including what they are prepared to spend.
According to the survey, the average price paid for a new item of jewelry is $1,207, although 51 percent said that they would only spend up to $500. Some 26 percent declared that they would spend from $1,000 to more $5,000 per item.
Jewelry is a high-ticket product, leading 57 percent of respondents to admit that the availability of financing would influence their purchasing decision.
At the same time, only 16 percent said that price was the most important factor when considering what jewelry to buy. Ranking above price was quality, which with 31 percent of support ranked as most important; design, which was cited by 23 percent; and uniqueness, ranked by 17 percent as being in the number one spot,
Mining at De Beers’ Jwaneng mine in Botswana. (Photo courtesy of De Beers)
Interestingly, some 72 percent of survey respondents said that they were ready to pay more for a piece of jewelry that was sustainably sourced, with 26 percent saying they would pay “a great deal” more.
The snow-swept open pit Alrosa’s Jubilee mine in Yakutia. (Photo courtesy of Alrosa)
DIAMOND INVENTORIES AT RECORD LOW LEVELS
Looking at the market update, Alrosa noted that jewelry demand remains strong in all the key countries. At the same time, it said, miners’ rough diamond inventories hit a rock bottom levels, and added that the midstream is also witnessing a decline in the inventories of rough and polished diamonds.
Demand for rough diamonds outstripped supply amid the recovery in production in Indian midstream and continuous demand for diamond jewelry in the key American and Chinese markets, Alrosa noted. Diamond shortages are boosting boost demand and creates upward pressure for rough diamond prices, the Russian company said.
In its report the De Beers Group stated the consolidated average realised price increased by 13 percent to $135 per carat during the first half of the year, compared $119 per carat during the corresponding period a year earlier.
This largely was because of an increased proportion of higher value rough diamonds sold, De Beers said.
While the average price index remained broadly flat, the closing index at the end of the second quarter was 14 percent higher than where it was to the start of 2021, De Beers added, reflecting the tightness in inventories across the diamond value chain, as well as positive consumer demand for polished diamonds.