The diamond market started the year on a high note before the COVID-19 pandemic wreaked havoc beginning March.
Demand for diamonds had been on a rebound since last August and this has been due to stable consumer demand for diamond jewellery at the retail level in the US and China.
Industry expert, Paul Zimnisky told Rough&Polished’s Mathew Nyaungwa that the positive trend can also be attributed to holiday demand that has been making its way through the supply chain coupled with many manufacturers being understocked due to the pandemic and related supply-chain challenges.
He said although the pandemic has hurt demand for most of 2020, when it comes to holiday shopping, diamonds, jewellery and other material luxuries, could actually outperform as people will not be giving a lot of experiential gifts as they have in recent years.
NB: Paul has launched a “Paul Zimnisky Diamond Analytics Podcast“, which provides a look into the global diamond industry with each episode featuring a special guest.
Below are excerpts of the interview.
What was the state of the rough diamond market in 2020?
Following an obviously very difficult first half of the year, there has been a positive trend of rough diamond demand improvement that was first seen in August that has continued through November. For instance, major miners saw rough sales fall 80 to 90% year-over-year in March through July, however, in August through October, ALROSA, for example, has seen sales notably improve with figures up 20 to 30% in those months compared to the same periods last year. Most recently, in November, De Beers saw sales increase over 10% year-over-year. In my opinion, the positive trend can be attributed to holiday demand that has been making its way through the supply chain combined with many manufacturers being understocked due to the pandemic and related supply-chain challenges.
Some diamond producers are now reporting a steady recovery of the rough market following disruptions caused by the COVID-19 pandemic. Is it too early to celebrate given the second wave of the pandemic in some major economies?
I think those in this industry as well as those following this industry now have much more conservative expectations. In recent years, we have seen what overly optimistic business practices can do to this industry. So, I think right now the industry is positioning itself with much more reasonable expectations. It would be great to see this industry under-promise and over-deliver for stakeholders.
