Diamonds are the hardest material on Earth.
Besides this, they are recognized as the most valuable component used in jewelry, an amazing investment opportunity, a symbol of good taste, and of richness.
The global diamond industry is worth billions of dollars, and every year it mines millions of diamonds for different uses. Some of them are sold to jewelry makers, some are sold as an investment asset, and most are sold for industrial use.
Diamond Industry in Post-Covid World
The peak of the diamond mining industry was in 2017 when 152 million carats of diamonds were produced. After 2017, diamond mining decreased around 5% per year. For example, only 142 million carats were mined in 2019. Yet, the worst year for diamond production was definitely 2020. With the global pandemic of Covid-19, the global diamond industry suffered as any other and diamond mining declined an estimated 20% compared to 2019.
All miners postponed sales and allowed their clients to withdraw from buying during a large part of 2020. Since there was less demand for diamonds, diamond prices decreased as well, with rough and polished diamond prices decreasing on average 11% and 3%, respectively. Rough diamond sales fell 15% in 2020 compared to 2019.
However, due to lockdowns, travel bans, and global financial uncertainty, diamond sales returned to their usual trading volume and value. According to a survey conducted in the US, over 75% of consumers stated they are willing to spend the same amount, if not more, on purchasing diamonds.
Who Profited the Most?
The biggest winner in the global diamond industry during 2020 were retailers in China. The second largest diamond consumer market also suffered from severe travel restrictions and local retailers benefited from that. Chinese consumers that saved money for travel, spent it instead on luxury products, including diamond jewelry. This led to a huge boost in sales compared to the year before Covid-19. Even though travel restrictions are lower now, it’s expected that retailers will continue to benefit from this demand, providing long-term growth for the Chinese diamond industry.
Another big profiteer from the global pandemic is e-commerce sellers. Since more of the purchases were done online, those retailers that sold diamonds online had a 20% increase in revenue compared to the prior year. Because people gained greater trust of online retailers and got the right product, this trend is expected to continue in the future, as it’s more convenient.
Global Diamond Industry – Statistics and Facts
The major diamond producing countries in the last 10 years are Australia, Canada, DR Congo, Botswana, South Africa, and Russia. As stated above, the largest consumer markets are the US, followed by China, India, and Japan. Millennials contributed to a surge in diamond consumption in these countries.
When it comes to diamond reserves, they are estimated to 1.2 billion carats, while the country with the most diamond reserves is Russia. It’s estimated that it holds around 650 million carats – 50% of world diamond reserves.
After this being said, you can see that even the pandemic, war, etc. cannot affect the diamond industry for too long. Despite lockdowns, restrictions, and economic declines, diamond retailers found their buyers and the price recovered faster than it’s the case with other investment assets. Whether you are an investor or not, diamonds are one of the assets you must take into consideration.