There’s Light at the End of the Tunnel
Dear Friends,
The pandemic is still with us and is continuing to limit how we live and how we do business. Around the world many countries are dealing with a resurge of the virus and a return to stricter measures. From various quarters we are hearing that until there is a vaccine, COVID-19 is here to stay and we must learn to live and work alongside it.
Thankfully the diamond industry is doing just that, and with a certain degree of success. While the first half of the year was almost a complete washout – with declines of about 70% – 80% in imports and exports in some centers – we are seeing some signs of recovery. It is clear that the responsible policy of De Beers and Alrosa of limiting production and flexibility toward customers, along with the limited capacity of the Surat manufacturing center, has had a positive effect on the diamond pipeline.
Here are some signs that promise a light at the end of the tunnel:
– Diamond prices are for the most part holding steady, mainly due to shortages in various categories.
– Q3 2020 is seeing smaller export and import drops, with July showing around 50% declines year over year. We expect that this will only strengthen over time and will deliver a strong holiday season.
– Manufacturers’ profit margins have improved and they are better than before the pandemic. Manufacturers are able to buy only the rough they need to meet actual demand.
– Diamond jewelry retail is doing fairly well. China has shown strong demand with sales soaring after the lockdown. In the United States, independent jewelers are reporting steady demand for jewelry to celebrate life-cycle events.
Our industry has proven its resilience by moving to online trading. Get Diamonds, for example, is enjoying a huge part of this traffic. Consumers are also buying more diamonds through ecommerce, with some of the largest luxury brands selling more diamond jewelry online.
All of the above are reasons for optimism. In the meantime, enjoy your summer holidays and come back refreshed and rejuvenated. The coming holiday season promises to be a busy one.
Sincerely yours,
Yoram Dvash
Acting President
WFDB
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