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Are Diamonds Still A Girl’s Best Friend? Industry Sees Major Downturn Amid Coronavirus Pandemic

By | Uncategorized

By Macy Kreiter

KEY POINTS

  • Overall jewelry sales were off 75% through April 1
  • Diamond producers are sitting on about $3.5 billion in stones
  • The world’s largest diamond mining firm, Russian-owned Alrosa, projects it will have a 30-million carat stockpile by the end of the year

With few jewelry stores open, consumers sitting on the sidelines and diamond exchanges closed as a result of the coronavirus pandemic, the mined diamond industry has ground to a virtual halt amid efforts to grapple with the growing popularity of synthetic stones.

Earnest Data estimates retail spending on jewelry in the U.S. was off 75% through April 1 while Dinesh Navadiya, GJEPC, estimated Indian diamond exports were off $846 million.

“We’ve never had an environment where commercial activity right across the whole pipeline, let alone the whole luxury goods industry, has simply come to a halt,” David Prager, executive vice-president corporate affairs at DeBeers, told Jeweller magazine. DeBeers, the world’s second largest diamond producer, estimated 2020 production will be down 20%.

Specialist advisory firm Gemdax estimated the five largest diamond producers are sitting on $3.5 billion in stones and that stockpile could grow to $4.5 billion. Russian diamond mining firm Alrosa, the world’s largest, said recently it could have 30 million carats on hand by the end of the year, which amounts to a full year’s production.

“They’ve tried to restrict rough-diamond supply to protect the market and protect value,” Gemdax partner Anish Aggarwal told Bloomberg. “The question will be, how does this destocking occur? Can miners destock and keep protecting the market?”

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Diamond sales freeze: ‘I’ll sort out the ring when the madness ends’

By | Uncategorized

Global industry that relies on sight and touch to attract consumers grinds to a halt.

By Emiko Terazono, Neil Hume and Anna Gross in London and Benjamin Parkin in New Delhi

 

When Kenneth Monahan, a financial analyst in New York, got down on one knee to propose to his girlfriend on a Delaware beach at dawn earlier this month, he presented her with a fake diamond ring.

With jewellery shops closed because of the lockdown, he said: “I’ll sort out the full ring when the madness ends.”

For many consumers, a diamond ring is a big financial — and emotional — investment, one that they are loath to make online, where it is harder to assess the cut and the clarity.

With malls and jewellery stores shut during the coronavirus lockdowns, the $80bn diamond industry has ground to a halt.

From the diamond mines of South Africa and the polishers in India, to the grading of stones in Antwerp and retailers in London’s Hatton Garden and New York’s Diamond District, each stage of the diamond value chain requires close personal contact and human handling. As a result, the industry has been hit hard by the coronavirus crisis.

“[The global lockdowns] impacted everything. Nobody [in the industry] was unaffected,” said Stephen Lussier, the head of consumer and brands at De Beers, the diamond group.

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The Great Diamond Glut: Miners Stuck With Gems Worth Billions

By | De Beers

The coronavirus pandemic has devastated the diamond world.

By Thomas Biesheuvel
June 7, 2020, 6:00 AM GMT+2

In one of the world’s biggest diamond vaults, hidden inside a nondescript office compound on the dusty outskirts of Botswana’s capital, the precious stones just keep piling up.

Owner De Beers, which mines and auctions most of its gems in the southern African nation, has barely sold any rough diamonds since February. Neither has Russian rival Alrosa PJSC. Now, as the coronavirus restrictions that froze the global industry for months begin to lift, the unsold diamonds present a dilemma: how to reduce billions of dollars’ worth of stocks without undermining the nascent recovery.

The pandemic has devastated the diamond world. Jewelry stores closed their doors, India’s cutting and polishing artisans were forced to stay home and De Beers had to cancel its March sale because buyers couldn’t travel to view the merchandise.

De Beers and Alrosa have moved to defend their market. The miners refused to cut prices, instead allowing buyers unprecedented freedom to renege on contracts to buy stones. They’ve also reduced production in an effort to control stock levels. Yet the diamonds keep piling up.

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The Problem With Diamonds Is They Keep Getting Cheaper

By | Uncategorized

Americans are buying more diamond jewelry than ever before, but prices for most polished gems are falling.

Five years ago, the diamond industry’s biggest worry was being forgotten by millennials, who — the theory went — didn’t covet sparkly gems the way their parents had.

The concern turned out to be mostly unfounded, but the reality is almost worse. While Americans are buying more diamond jewelry than ever before, most polished diamonds are getting steadily cheaper. The lower prices and a glut of the type of stones that go into a discount-store engagement ring or pair of earrings have pushed the global diamond trade into crisis.

At the center of the pain are the middlemen who cut, polish and trade the world’s diamonds. Their profits evaporated as polished stones lost value, banks tightened financing, and top producer De Beers held firm with prices it demands for the rough diamonds it digs up.

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2019 Dubai Diamond Conference

By | Uncategorized

A number of technological disruptions are set to change the shape of the industry. Gemdax moderates a number of panels at the Dubai Diamond conference where industry leaders discuss the opportunities and challenges for miners, the midstream and retailers.

Opening address by Ahmed Bin Sulayem, Executive Chairman and CEO, DMCC – Video

Special address by Sergey Ivanov, CEO, ALROSA – Video

Market Review by Anish Aggarwal, Founding Partner, Gemdax – Video 

Panel 1: Technology Disruption: How will increased manufacturing automation affect our supply chain? 
Moderator: Anish Aggarwal, Founder, GEMDAX
David Block, CEO, Sarine
Bernold Richerzhagen, Founder and CEO, Synova
Faried Sallie, Head of Technology, De Beers Group
Tom Moses, Executive Vice President and Chief Laboratory and Research, GIA
Video

Panel 2: Market Disruption: The advent of lab-grown diamonds – what does it mean for the diamond sector?
Amish Shah, President, ALTR Created Diamonds
Stuart Brown, CEO, Mountain Province
Stephen Lussier, Chairman and Executive Vice President, De Beers
William Shor, Managing Partner, Caspian VC (CVC)
Video

Panel 3: Making sense of the disruption: How do we bring positive change given the disruption and current market conditions?
Davy Blommaert, Head – Diamond Business Corporate and Institutional Banking, NBF
Jim Pounds, Executive Vice President, Diamonds of Dominion Diamond Mines
Biju Patnaik, Executive Vice President and Head, Gems and Jewellery, IndusInd Bank
Martin Leake, Special Advisor for Precious Stone and Gems, DMCC
Video

 

De Beers hits a rough patch as diamond sales slide

By | Uncategorized

Industry struggling with economic uncertainty and rise of lab-grown stones.

Diamond purchases at De Beers’ latest sale in Botswana plummeted 44 per cent, as the industry struggles with weaker consumer spending and the rise of lab-grown stones.

The world’s largest diamond miner said on Wednesday that sales of rough diamonds were $280m at last week’s sale compared with $503m in the same period a year ago.

The sharp decline follows another weak sale last month. So far this year, at $2.9bn, De Beers’ rough diamond sales are 26 per cent lower than the $3.9bn recorded at the same time last year. In July, Russian diamond producer Alrosa reported a 51 per cent fall in diamond sales.

“The current malaise in the market is due to oversupply,” said Paul Zimnisky, an analyst in New York, who said diamond buyers had too much inventory.

Macroeconomic uncertainty and, in particular, the trade war between the US and China, the world’s two largest diamond-consuming countries, has fuelled nervousness among wholesalers and retailers.

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De Beers Will Let Buyers Reject More Diamonds to Fend Off Crisis

By | Uncategorized
  • Buyers can sell back more diamonds to De Beers, people say
  • De Beers is making concessions as diamond industry struggles

De Beers will let buyers reject more diamonds at a sale next week as the mining company shows almost unprecedented flexibility to ease a growing crisis.

The Anglo American Plc unit has told customers they can refuse to buy half of the stones offered that are smaller than three-quarters of a carat, according to people familiar with the situation, who asked not to be identified as the matter is private. Buyers will also get the option to sell back some diamonds to De Beers on favorable terms, the people said.

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Anglo’s Diamond Riches Could Be Key If Agarwal Stake Grows

By | Uncategorized

Much of the focus around Indian mining tycoon Anil Agarwal’s pursuit of Anglo American Plc has been the company’s South African operations. But Botswana could be similarly important.

Botswana is the source of about two-thirds of Anglo’s diamonds and the country is a major stakeholder in De Beers, the world’s biggest gem producer. There are few countries as dependent on a single commodity as Botswana is with diamonds and the nation is highly protective of the industry.

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