The diamond market in great shape
Audio 01:35
A diamond mine.
REUTERS / Sergei Karpukhin
By: Marie-Pierre Olphand Follow
4 min
Not all raw materials have plunged with the pandemic.
The diamond is the illustration.
The past year has been much better than expected.
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English speakers call it
Revenge shopping
or
Revenge spending,
or in French, “
revenge through shopping
”. Deprived of tourist trips, sometimes survivors of the Covid-19, buyers have indulged in the latter and invested in diamonds: to such an extent that the precious stone is an exception in a luxury market, which has been hit hard. by the crisis linked to the pandemic.
As a result, the year 2020 was much better than expected.
And the trend seems to be confirmed: since January, as many diamonds have been sold as in 2018 for the same period.
2018, the last benchmark year for diamond sales, says Karen Rentmeesters, representative of AWC (Antwerp World Diamond Center), the structure that oversees diamond professionals in Antwerp.
At the height of Covid-19, processing times for rough diamonds had lengthened, but India, where nine-tenths of the stones are polished, has now regained its 2018 activity rate, which also allows such a rebound on the steps.
Miners' inventories fell in response to demand
However, this craze was not anticipated by the miners: the six majors in the sector significantly reduced their production last year. And since then their reserves have melted: thus, in ten years, the first producer Alrosa has never posted a stock so low as in this summer. This is not enough to speak of a shortage, because the market is rather stabilized, but certain qualities are now lacking.
Sales took off again last Christmas, then Chinese New Year, and Valentine's Day did the rest.
Another major driver: weddings!
As the number of guests allowed is often always limited, unspent money was transferred to the size of polished diamonds offered on occasion.
Most of the demand comes from the United States and China.
It is so strong today that a trader confided in recent days that he had had to recruit employees to respond to the frenzy of calls from buyers.
Will demand soon be stronger than production?
But this improvement is not for all that a source of serenity for diamond dealers.
Last November, Rio Tinto shut down the world's largest pink diamond mines in Australia.
She had reached the end of her life.
For the moment, it is difficult to know if another deposit of the same quality will take over.
Total world production is falling every year, and there will come a day when all of the demand can no longer be met.
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Raw materials
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