What’s happening with diamonds?
This April was tough for diamond dealers. Practically everybody announced a significant drop in their sales figures. The same applies to national economies. For example, Belgium, the key diamond hub, experienced a decrease in imports by 70% and exports by 50%.
General stagnation calls all the diamond companies and brands to change. They cut production forecasts, limit budgets, and simply freeze the whole economic activity. Anyhow, diamond businesses do everything to cover their basic needs for survival.
What is the biggest problem Coronavirus has provoked?
For diamond trade, the most considerable trouble is the closed borders. They break the classic structure of the supply chains.
De Beers, the biggest diamond dealer, became a victim of these circumstances. With closed airports, buyers cannot travel to Botswana to complete their sales. The same story repeats in the Chinese market. This area has been experiencing the destructive effect of Coronavirus since its first wave in February. All that's possible right now is to cut sales by 25% and donate this money to support African partners.
Other diamond cutters and polishers all over the world also have problems due to the inability to do international business. All the middlemen depend on both imports and exports — and the frozen transactions threaten their businesses the most.
As a result, everybody who demonstrated solid performance this January, report hardship this spring. Coronavirus didn't spare anybody — including Lucara Diamonds Corporation, Petra Diamonds, and Firestone Diamonds.
How will the diamond market survive the crisis?
The main scenario is not optimistic. Most industry experts expect the decreased demand for diamond jewelry after the crisis. The positions of international brands, like Cartier, Pandora, and Tiffany, will be shaken. They already lost a significant part of their sales after the Chinese lockdown. And times are going to be harder.
However, there are some alternative predictions. In a favorable scenario, economists expect a possible increase in diamond jewelry purchases. Since the world will remain cautious about traveling and opening borders, many consumers can turn to diamonds in their luxury spending behavior.
The bottom line
On the one hand, the diamond export decreased, and the future forecasts are not encouraging.
On the other hand, it’s always darkest before the dawn. And the experience of China shows: after the quarantine is over, customers are eager to spend again. So, life can come back to normal pretty fast.
Meanwhile, we at Diamond Registry help our customers identify great deals in purchase of diamonds. When sales are on the decline, it's a great time to find large discounts. Get yours — just fill the contact form below!