Edahn Golan: Diamond Industry Q1 Analysis

In-depth
14/04/2020 11:21

Industry analyst Edahn Golan takes an in-depth look at the industry performance of the first quarter of 2020 which, needless to say, is dominated by the impact of the Corona virus pandemic. In his extensive analysis Golan discusses polished diamond price evolution, the state of the midstream in all major trading hubs, banking and evolutions upstream and regarding LGD (Lab Grown Diamonds).

Golan identifies a number of key take-aways for Q1:

  • Polished diamond prices were largely stable in March after rising in January and falling in February.

  • Wholesale inventories rose following large rough purchase and a drop in sales.

  • Demand plummeted to its lowest since 2009.

  • US: Despite continued activity deep into March, a rise in unemployment threatens to add an additional burden on future diamond sales, especially bridal.

  • India: The country is under full lockdown and diamond activity is down to a trickle.

  • Belgium: Government-backed support is eleviating some of the pain, including an important agreement with banks on credit supply and interest rates.

  • Hong Kong: Long hard hit, yet in late March some activity resumed.

  • Israel: The worst hit diamond center. With no government support for the industry and a soaring 25% unemployment rate, the prospects are grim. The Mizrahi/Union bank merger is on hold.

  • Bank financing continued to decline during the quarter, mainly in Israel.

  • An exceptionally high rough diamond supply in January was reduced to near zero in March.

  • Rough diamond prices at tenders were down sharply.

  • LGD prices were stable until February, and then trade stopped.