As the covid situation in India worsens, the World Federation of Diamond Bourses (WFDB), through email and social channels, is asking diamond and jewelry industry members to donate to help their Indian colleagues and friends win the battle against the Virus. The campaign, Diamond Aid, organized with Bharat Diamond Bourse (BDB), will use the funds raised to purchase medical equipment and medication for hospitals in Surat and Mumbai.
During the height of the pandemic, diamond producers faced stockpile build-ups when the world came to a standstill, stoking fears that gems amassed by miners could hurt the sector for years to come. In the ensuing months' excessive demand from manufacturers, traders, and jewelers have all but wiped out the stash. All this as demand for luxury sales, including diamond jewelry, jumped as consumers were unable to travel. Remarkably producers such as De Beers and Alrosa have since raised their prices for rough.
The Bharat Diamond Bourse is fully closing as of 8PM tonight until further notice as the Maharashtra Govt declared a state-wide lockdown and curfew after the official number of Covid cases peaked to over 57.000 in the state, 11k in Mumbai alone on Sunday.
Covid-19 had a dramatic impact on trade shows and many companies tried replacing them by virtual meetings. Even though companies’ turnovers were unaffected because exhibitors saved money – booths, hotels, travel, etc. - by not participating, virtual meetings lack attendee engagement compared to the live events and face-to-face meetings still prove to be most successful in networking. Furthermore, companies have to be where competitors are, so when trade shows get back on track, companies that ignore them will fall behind.
Although the pandemic has continued to dominate headlines, a year after the outbreak in the US and Europe, an Israeli study has underscored the effectiveness of the vaccine in preventing infection. This, along with news of the Biden administration accelerating the vaccine rollout in the US, and the UK’s successful vaccination program, has given consumers hope that there is light at the end of the tunnel.
Alrosa, the Russian diamond mining giant reports that despite a strong Q4 2020, with especially strong sales volumes of smaller diamonds, total revenue for the year fell 7% to US$3bn, output fell 22% to 30m cts and net profit dropped 49% to US$440m, a direct impact from lower sales, as the miner upheld maximum flexibility throughout the pandemic, to avoid stockpiling, as well as a weaker rouble.
In a release detailing its operational results for the COVID year 2020 and the last quarter of that year, Lucara clearly demonstrates its strengths, recording a strong performance despite the pandemic. Total revenue (regular tenders, Clara plus the HB and Louis Vuitton agreement) amounted to US$125.3m, compared to US$192.5m y-o-y, a remarkably strong performance considering the impact of the COVID-19 pandemic. A strong Q4, with revenue of US$42.4m at an avg US$402/ct marked a global recovery on the rough market, a trend which is continuing in 2021.
A lovely springtime sun is warming up the Antwerp diamond square mile, boosting temperatures from snowy below zero barely a week ago to a pleasant 15°Celcius. The weather is echoing the sentiment on the market and at Petra Diamonds, as both have emerged from tough times probably stronger than before.
Since the outbreak of the pandemic in March last year, Petra Diamonds was one of the first to shift gears as the world was paralyzed. The Johannesburg sales were put on hold and the miner started focusing its sales on Antwerp, where operations continued despite global lockdowns.
Reprinted courtesy of Paul Zimnisky. Despite relatively stable consumer demand for diamonds in established markets like the U.S. and notable growth from newer markets like China, for the most of last decade the diamond industry has felt apathetic. This can in part be explained by an arguably oversupplied supply-chain, insufficient marketing efforts and a general pessimism towards the diamond business as a changing consumer economy challenges traditional industries.
2020 proved to be quite a challenge with regards to hosting in-person trade fairs, and although online alternatives accelerated the digital revolution within the industry, there is no doubt that in-person viewing and buying is still very much the norm.
Lucapa reports strong Q4 results at its Lulo operations in Angola (volume of carats mined was up 55%, grades were up 47%, amount of carats sold was down 48% (4,269ct) but prices were up 31% y-o-y.
In its first trading session of the new year, Alrosa is maintaining its flexible trading conditions for long-term clients, to support stability and long-term health of the industry. The flexibility allows clients to defer allocations and purchase diamonds aligned with real needs, viewings are remote through video-viewer or, under strict procedures, in Moscow.
Signet's preliminary holiday sales results indicating the retailer's Path to Brilliance digital first transformation is paying off. JCK reports. E-sales increased 60.8% compared to the same period (Nov 9-Jan 2) y-o-y, while sales in physical stores dropped 4.1%.
Alrosa, the Russian mining giant, ended 2020 on a high note with total sales figures of US$521.6m, which, according to Rapaport, were the highest since March 2018, marking what deputy CEO Evgeny Agureev said was strong demand from the market.
According to Jing Daily, China is ready for lavish Chinese New Year Celebrations, after last year's festivities were cut short by the outbreak of the Corona virus pandemic, luxury brands are eager to take full advantage of the upbeat sentiment and expectations for strong sales of luxury items are high. The threat of a new wave of the pandemic hitting mainland China however remains.
While it is clear COVID-19 had a major impact on what will be recorded in history as one of the most difficult years ever for the global diamond industry, one thing is certain, as far as diamond trade is concerned, Antwerp managed to keep the engines running in 2020, fueled by nearly 100 rough tenders that were held in the city in the past year.
Mining.com reports the troubled Dominion Diamonds has brokered a deal to sell its Ekati mine, not the 40% stake in the Diavik operation, both in the Canadian Northwest Territories to an entity controlled by DDJ Capital Management LLC and Brigate Capital Management LP, in exchange for the assumption of US$70m in debt.
HKTC announced today that due to continued restrictions on international travel, the organizers have decided to postpone the HK March shows, The HK International Diamond, Gem & Pearl Show (1-5 March) and HK International Jewellery Show (3-7 March) are rescheduled to 2-6 July 2021, at AsiaWorld-Expo.
In an elaborate update on the impact of COVID-19 on the global luxury industry, Bain & Company details how the luxury goods industry, has witnessed its sharpest drop in decades, estimated to reach recovery by 2022-2023.
Changing dynamics, such as little to no travel or tourism, changing spending patterns and beliefs and enduring restrictions are shaping the luxury industry of the future, which Bain believes is resilient enough to transform and redefine its purpose to remain relevant, especially towards new, young consumers.
A few key takeaways:
In an elaborate report, availabe in full via Idex Online here, industry veterans and experts Chaim Even-Zohar and Pranay Narvekar dissect the 2019 and 2020 pipeline with surgical precision. A few key take-aways from the report:
Petra Diamonds in its trading update for Q1 FY 2021 (July through to September) reports a 10% decrease in production to 974,346ct, which the miner attributes largely to the continued care and maintenance status of the Wiliamson mine in Tanzania. The miner also reports a 33% increase in revenue, to US$82m, as Petra released inventory from Q4 2020 and rough prices at the latest tenders (September and October) firmed up significantly, although still 10% below pre-covid tender results, the company statement adds.
De Beers reports selling US$467m worth or rough diamonds at its latest sales cycle, 57% more than the same sales period in 2019, 40% higher than the previous sale, further confirming rough demand has picked up significantly in view of the holiday season. The miner, who discounted prices by 5 to 10% according to industry insiders, went through several months of near zero sales, at the peak of the pandemic's first wave, and implemented maximum flexiblity to its long-term customers. In the latest cycle, it also extended the usual one-week sales momentum to more than 3 weeks.
CBC news reports that negotiations around the US$126 million sale of a number of Dominion's assets, including the Ekati mine, to affiliates of owner Washington Companies have reached an "impasse" with no chance to reach an agreement before the deadline of Oct 14.
Economic Times India reports that this year, some 650,000 diamond polishers in the country's main polishing hub Surat will skip the Diwali holidays this year, as global demand for polished diamonds is ramping up ahead of the holiday season. By continuing to work, many units are trying to make up for losses, caused by the COVID-19 pandemic and the virtual shutdown of manufacturing. An estimated 5,000 polishing units out of 7,000 total have now resumed activities, at 70% capacity and according to the GJEPC, India's overall exports are now estimated to be at 50%.
Osisko Gold Royalties, one of the secured creditors which acquired Stornoway's assets and properties a year ago as well as its debts and liabilities yesterday announced the Renard mine operations will resume later this month, after a four-month suspension due to liquidity issues. The restart plan includes a further cost reduction of $30 million and a commitment to boost working capital with another $30 million by shareholders. Stornoway is also expected to bring over 300k carats of unsold rough to the market later this year.
The Antwerp World Diamond Centre and Israeli Diamond Institute, in collaboration with VDB Expo, this morning kicked off a three day Online Diamond Trade Show, featuring 50 exhibitors from Israel and Antwerp. The event, which is open 24 hours a day and has direct communication features including live videochat, already has 800 registered professional buyers, from over 50 different countries. In the pre-covid era, traders would now be gearing up to ship goods and travel to the Hong Kong September show.
Grib Diamonds sold 100% of its wholly owned Russian production in Antwerp yesterday, Monday 7th September. 390K carats of Russian goods were on offer which sold for more than $25M. Over 300 companies were invited to participate in the viewing of which 159 were active in the auction. “Bidding was stronger than any Grib sale seen since December 2019 with nearly 5,000 bids made. Prices rose to levels not seen since the beginning of the 2020, with particular strength noted in the cheaper goods and smalls.”, the company said.
Bloomberg, citing the encouraging jewelry sales results of brands like Signet, Tiffany and Macy's, reports that US shoppers - at least those who can - are spending their money on diamond jewellery, rather than trips or restaurant visits. High-end products have been performing particularly well in the last quarter and those spending are spending more than normal on items, the article states.
In a Q&A following the announcement of interim results, GEM Diamonds CEO Clifford Elphick said the company is not pursuing any of Petra's assets. "They are lovely assets but there is a massive debt pile and everyone looks at this in the same way … We’re near the end of all this.”, Elphick said. In the first half of 2020, GEM Diamonds reported a US$1.7 million loss, compared to a US$ 4.2 million profit in the same period last year, and the Letseng mine production forecast was adjusted to 96,000ct down from 100,000ct.
According to an opinion piece by Rough&Polished's Sergey Goryainov, the Russian State Repository may be in the process of buying US$ 1 billion worth of (rough) diamonds from Alrosa, the Russian mining giant, to alleviate the pressure on the company as the industry suffers from the COVID-19 pandemic. The author believes that what he describes as a "bailout" for both the industry and Alrosa by the Gokhran is inevitable and necessary move.
Accelerated by the COVID-19 pandemic, Signet Jewelers CEO Gina Drosos is rolling out the Path to Brilliance transformation which focuses on dramatically changing the customer experience by bringing it into the digital world, with virtual appointments, Live experts and events and tying into customers' personal social media channels. The transformation process, which had been initiated before the pandemic, also aims to maximize on current trends focusing on value, values and trust consumers place in Signet's brands with an omnichannel approach.
After major miners De Beers and Alrosa announced price cuts, Bloomberg reports that the combined sales of their recent long-term client sales amounted to US$500 million, in stark contrast with the near-zero sales of the past six months, as the pandemic broke out and both companies decided to maintain pricing but maximize flexibility to their clients to defer contract purchases.
According to Morgan Stanley analysts, in the 2nd half of 2020, De Beers' sales could rebound to US$1.6 billion, a recovery they believe will be driven by the holiday season, traditionally a strong sales period. The miner, for 85% owned by Anglo American, clocked an EBITDA of only US$2 million in the first half of the year, as De Beers' sales of rough diamonds dropped to nearly zero due to the global pandemic.
Figures released by the Antwerp World Diamond Centre on the first six months of the year indicate that in terms of value, trade in the world’s diamond trade hub halved as a consequence of the impact of the COVID-19 pandemic on the global diamond and jewelry business.
According to figures released by the GJEPC, India's rough imports plummeted to 82% in the period between April and July, as a consequence of the global pandemic as well as a voluntary ban on rough imports that was implemented for several months. In value, rough imports decreased sharply from US$ 4 billion to US $712 million, while polished exports fell 47% to US$ 2.7 billion (compared to US$ 5 billion year-on-year).
Alrosa, the Russian mining giant says it is close to finalizing a deal in which the Gokhran, the Russian State Repository will buy a significant volume, ranging between US$500 million and US$1 billion, worth of diamonds. “It’s a question of state-government support to our company,” Evgeny Augurev, Alrosa's Vice CEO commented, “And not only to our company, but to the whole industry.”
According to data from Edge Pulse, The Edge Retail Academy's aggregated jewelry sales data platform, US independent jewelers' uptick in sales in June is continued and even amplified in July, with a 10% increase in gross sales. Remarkably, diamonds are driving the improved sales trend, with a 16% increase in gross sales and 19% in the amount of units sold in July.
Rapaport reports that their price index shows polished prices have improved in July, as a reduction in diamond supply, on both rough and polished side, are causing supply shortages for certain goods. The RAPI index for 1ct diamonds was up 1.9%, which Rapaport claims is boosted by increased demand from investors for high-end, D - IF stones. Year to date, the index fell 4.8%. Rapaport believes that in the long run, the need for more efficiency in supply and demand, enabled by technological innovations will result in a more profitable trade.
According to MiningMX, GEM Diamonds, operating the high-quality diamond yielding Letšeng mine in Lesotho, halved its net debt to $5.5 million (compared to $10.1 million at the end of 2019) as a result of improving efficiency and successfully reducing costs, such as management salary cuts that remain in place, as well as higher than expected sales results, with an average of $1,707 per carat in the first half of the year.
After months of a virtual standstill in most of India's polishing industry, the Indian diamond industry trade bodies say polishing activity in Surat is now at 20-30% capacity, and they are no longer calling on the local manufacturing sector to voluntarily ban imports of rough diamonds.