Global diamond market does a ‘dive and bounce’ in 2020 - report

While 2020 was a challenging year, it recovered quickly, and all came together in the fourth quarter, says the recent Golan Diamond Market Report. According to diamond industry analyst Edahn Golan, who cites the latest government data in his report, the total US jewelry sales soared to $13.23 billion in December 2020, bringing total 2020 retail sales to $62.68 billion.
On the speciality jewelry retailers, Golan says the situation was challenging throughout the year. The dive was deep, and some did not recover, but collectively, retailers did recover. Calling the retailers comeback in December aptly as ‘dive and bounce’, Golan describes speciality jewelers sales average as incredible. 
The report says that the diamond sector typically suffers the most is the midstream. Manufacturers and wholesalers were forced to practically close shop for a period during 2020. However, following the bounce in retail sales in June, wholesale activity resumed as well.
The resumption of retail sales, first in China and then in the US, provided them with an opportunity to dry out their stock of goods. It was not a quick bounce back as in retail, but a paced one. After prices sunk for six months, reaching a low in July, they started to recover, posting a near-full recovery by the end of December.
The most gradual return to full activity was that by mining companies. After a period of primarily relying on tenders for their rough diamond supply, the diamond market maintains an ample supply of rough diamonds. Both De Beers and ALROSA have increased prices.
According to Golan, the lab-grown diamonds (LGDs) had it in their unique way, behaving very differently than natural diamonds, as loose or set in jewelry. From the perspective of wholesale prices, LGDs started 2020 strong. Wholesale transaction prices, as tracked by Golan’s lab-grown price list, increased overall by 5.3% in the first quarter. The few price decreases were in the smaller goods.
Due to a decline in diamond activity in 2020 that had a direct impact on banks, diamond financing too shrunk in 2020. But, traders proved exceptionally reliable in repaying their debts, on one hand, but had a decreased need for financing on the other. Golan concludes that after two complicated years, the dive and bounce is likely behind the industry, and can up its game in 2021 based on its 2020 lessons. 

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished