Demand for diamonds plummets but bright spot is affluent investors
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Johannesburg/Mumbai — As the coronavirus pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming. Patel, who worked for a decade in India’s Surat where about 80% of the world’s diamonds are polished, joined the exodus of gem workers leaving the city as cases of the virus shot up.
After taking up farming in his home village, he has no plans to return in the coming months. “I won’t earn as much I was earning in Surat, but I won’t starve and there is no fear of getting infected with coronavirus,” he said.
Covid-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%s. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones. The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data.
“There are a lot more enquiries from people seeking to buy these luxury stones as a hedge,” said Chris Del Gatto, CEO of the DelGatto Diamond Finance Fund, the largest nonbank lender to the diamond, jewellery and watch industries. Prices for high quality one-carat diamonds are rising steadily and are currently about 12% higher than at the start of 2020, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows.
“If you are in that top end, the demand is still there because the people who go for these type of goods feel the pressure of the market downturn less,” said Gus Simbanegavi, CEO of Bluerock Diamonds. But only a few miners are lucky enough to have deposits of large, high-quality diamonds, leaving some producers at risk.
Grim year
Covid-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%.
“What has happened in the second quarter, I have never seen in my life,” De Beers CEO Bruce Cleaver said. “There was no really properly functioning rough market.” Indian imports of rough diamonds plunged from $1.5bn in February to just $1m in ...
After taking up farming in his home village, he has no plans to return in the coming months. “I won’t earn as much I was earning in Surat, but I won’t starve and there is no fear of getting infected with coronavirus,” he said.
Covid-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%s. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones. The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data.
“There are a lot more enquiries from people seeking to buy these luxury stones as a hedge,” said Chris Del Gatto, CEO of the DelGatto Diamond Finance Fund, the largest nonbank lender to the diamond, jewellery and watch industries. Prices for high quality one-carat diamonds are rising steadily and are currently about 12% higher than at the start of 2020, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows.
“If you are in that top end, the demand is still there because the people who go for these type of goods feel the pressure of the market downturn less,” said Gus Simbanegavi, CEO of Bluerock Diamonds. But only a few miners are lucky enough to have deposits of large, high-quality diamonds, leaving some producers at risk.
Grim year
Covid-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%.
“What has happened in the second quarter, I have never seen in my life,” De Beers CEO Bruce Cleaver said. “There was no really properly functioning rough market.” Indian imports of rough diamonds plunged from $1.5bn in February to just $1m in ...
