The global diamond industry proved resilient in 2020, despite a 20 per cent drop in rough production and a fall of 15 per cent in diamond jewelry sales. And it is poised for recovery in 2021.
Those are among the key findings of the comprehensive 54-page Tenth Annual Global Diamond Report 2020-2021, published today by the business consultants Bain & Company and the Antwerp World Diamond Centre’s (AWDC).
It says diamond jewelry outperformed the luxury sector in general, suffering a 15 per cent drop compared to 22 per cent.
Consumers who couldn’t travel bought gems instead and around 20 per cent of diamond sales were online, compared to 13 per cent in 2019.
Most miners reported rough diamond prices up between five and eight per cent in January, and the majors maintained a flexible sales policy which contributed to a strong start to 2021.
Demand returned during the fourth quarter of 2020, culminating in a strong holiday season across the globe, said the report’s authors.
“The industry proved its resilience in the face of an economic downturn as consumers continue to see its value. The boost was driven by holiday jewelry sales, particularly in the US and China,” they said.
Rough diamond production fell to to 111 million carats – having peaked at 152 million carats in 2017 – but the mix of diamonds remained largely constant, with medium and large diamonds accounting for 25 per cent of production volume in carats (70 to 80 per cent in value in US dollars).
“The diamond industry has shown remarkable agility in the face of a crisis and the pace of change has accelerated,” said Ari Epstein, CEO at AWDC.
“Throughout the diamond value chain, players have adapted quickly and consumers of diamond jewelry have shown that they value the final product and are willing to invest in it, even in difficult times. We expect the industry to recover and emerge stronger from the storm.”
Olya Linde, a partner in Bain & Company’s energy and natural resources practice, said: “In 2020 the diamond industry as a whole unexpectedly benefited as consumers unable to spend on experiences or travel used those funds for items such as diamonds, which are considered a tangible physical investment.”